Question:
Advocates of variable costing argue that:
A) fixed production costs should be added to inventory because such costs have future service potential and therefore are inventoriable as an asset.
B) fixed production costs should be capitalized as an asset and amortized over future periods when benefits from such costs are expected to be received.
C) fixed production costs should be charged to the period in which they are incurred unless sales do not equal production in which case any difference should be capitalized as an asset and amortized over future periods.
D) fixed production costs should be charged to the period in which they are incurred.