The manufacturing cost per unit for absorption costing is
A) usually, but not always, higher than manufacturing cost per unit for variable costing.
B) usually, but not always, lower than manufacturing cost per unit for variable costing.
C) always higher than manufacturing cost per unit for variable costing.
D) always lower than manufacturing cost per unit for variable costing.

Question

Quizplus · Accepted Answer

Absorption costing includes all manufacturing costs, such as fixed overhead costs, in the cost per unit, while variable costing only includes variable manufacturing costs. Since fixed costs are included in absorption costing, the manufacturing cost per unit is always higher than variable costing.

The Manufacturing Cost Per Unit for Absorption Costing Is