Question: Why is the term direct costing a misnomer? A. Variable (direct) costing includes as inventoriable costs not only direct manufacturing costs but also some indirect

Why is the term direct costing a misnomer?

Variable (direct) costing includes as inventoriable costs not only direct manufacturing costs but also some indirect costs (variable indirect manufacturing costs).

Variable (direct) costing does not include all direct costs as inventoriable costs. Only variable direct manufacturing costs are included. Any fixed direct manufacturing costs, and any direct nonmanufacturing costs (either variable or fixed), are excluded from inventoriable costs.

Variable (direct) costing considers both variable manufacturing and variable nonmanufacturing costs as period costs, which are expensed.

Both a and b are correct.

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