Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



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Solutions to review questions
7.1
No. Differences between variable costing and absorption costing are due to accounting for fixed manufacturing costs. Fixed marketing and distribution costs are not accounted for differently under variable costing and absorption costing.
7.2
Yes, variable manufacturing costing is a more descriptive term than variable costing. The focus is on manufacturing costs only. Variable marketing and other variable non- manufacturing costs are treated as period costs when variable costing is used.
7.3
The main issue between variable costing and absorption costing is the proper timing of the release of fixed manufacturing costs as costs of the period

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