When using absorption costing, the costs that are inventoried include:
- Variable manufacturing costs (option c)
Absorption costing, also known as full costing, includes all manufacturing costs—both fixed and variable—as part of the product cost. This means that the costs directly associated with the production of a good are considered inventoried until the product is sold.
In contrast, variable selling costs, fixed administrative costs, and fixed selling costs are period costs and are not included in inventory. Period costs are expensed in the period they are incurred, rather than being included in the cost of inventory.
Therefore, among the options provided, variable manufacturing costs is the only cost that would be inventoried under absorption costing.