A basic tenet of variable costing is that fixed overhead costs should be currently expensed. What is the basic rationale behind this procedure?
a. Fixed overhead costs will occur whether or not production occurs and so it presents a clearer picture of how changes in production volume affect costs and income.
b. Fixed overhead costs are generally immaterial in amount and the cost of assigning the amounts to specific products would outweigh the benefits.
c. Allocation of fixed overhead costs is arbitrary at best and could lead to erroneous decisions by management.
d. Fixed overhead costs are uncontrollable and should not be charged to a specific product.
a
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