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i just want to make sure if i’m right or not
in marginal costing all variable cost are included in inventory valuation. Here variable cost only refers to the variable overheads that are incurred in factory…..Not any non-production variable overheads like sales commission on per unit sold……….its variable overhead but non-production cost.
You are right – only production variable costs are included in the valuation of inventories (if it is marginal costing).
and in case of absorption costing we include both variable production overhead and fixed production overhead.right
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