Final answer:
When using absorption costing, most firms allocate fixed manufacturing overhead costs to the cost of the product.
Step-by-step explanation:
When using absorption costing, most firms allocate fixed manufacturing overhead costs to the cost of the product. This means that these costs are included in the product's total cost and are absorbed by the units manufactured and sold. This method is commonly used for external reporting purposes and to determine the full cost of a product, including both variable and fixed costs.