[misanthrope87]

I’m confused. Under variable costing, the variable selling, general, and administrative expenses are part of the total variable costs for the contribution margin calculation. However, these costs are not included when valuing inventory? Is this correct? I was thinking that they were included in inventory valuation because these costs are included in calculating contribution margin. But maybe not..can someone clear this up for me?

B 2/12 87
A 11/11 90
R 8/11 86
F 5/12 88

[rezaking]

@misanthrope87… if i am not wrong, you are using becker? i was confused about this as well.. Becker says SG&A are include in CM calculations but when i did a few MCQ's the answers did not include SG&A.. I believe they are not included and SG&A are period costs and are expensed in the period incurred.. hope this helps.

BEC - Passed
REG - 7/21/2012
AUD - 8/18/2012
FAR - 11/10/2012

[misanthrope87]

Ya I am using Becker. =/ It's pretty confusing. The books says inventory values include only the variable manufacturing costs, but calculating the contribution margin includes the variable selling, general, and administrative expenses as well. We need some confirmation. =/

B 2/12 87
A 11/11 90
R 8/11 86
F 5/12 88

[shutterbug]

Under variable costing, the variable SG&A expenses are part of the total variable costs for the contribution margin.. however not included in product cost/inventory/COGS.. SG&A is a period cost under both absorption and variable costing methods. Let me screenshot my notes..

FAR 73 78
BEC 73 82
AUD 65 83

[shutterbug]

Hope this helps.. I learn better when everything is in a table! Becker makes it a lot more complicated than it really is.

https://i44.tinypic.com/winali.jpg

FAR 73 78
BEC 73 82
AUD 65 83

[misanthrope87]

@Shutterbug

Thanks for confirming. This is my 2nd time going over the material so I definitely wanted to get that concept down.

B 2/12 87
A 11/11 90
R 8/11 86
F 5/12 88

[tmw0918]

Under variable costing, all Variable costs including SG&A are included.

[Author]

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