Respuesta :
The fixed manufacturing overhead costs are shifted from one period to another under absorption costing by variation in producing and selling goods periodically. Fixed overhead charges are usually allocated over several units produced, however, the number of units sold is different from the number of units produced.
- Fixed manufacturing overhead costs are monthly or annual expenses that remain constant regardless of production volume or the total number of our production equipment was in operation. Example like, property tax, rent, and depreciation on factory etc., that have been assigned to (absorbed by) the products manufactured via a predetermined rate. Absorption costing treats all manufacturing costs as product costs, regardless of whether they are variable or filed.
- Fixed manufacturing overhead costs are shifted from one period to another due to changes in inventories under absorption costing. Every unit that is produced is assigned some fixed manufacturing overhead costs. Assuming that the said unit is not sold during that period, the fixed manufacturing cost assigned to that unit will then become part of the inventory and reported on the balance sheet and not the cost of goods sold.
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