Given the following data, total product cost per unit under absorption costing will be $400 greater than total product cost per unit under variable costing.

Question

Quizplus · Accepted Answer

Under absorption costing, fixed manufacturing overhead costs are included in the product cost calculation, while under variable costing, they are treated as period expenses. This means that total product cost per unit under absorption costing will be higher than under variable costing by the amount of fixed overhead cost per unit. Therefore, if it is given that the difference in total product cost per unit between the two methods is $400, it means that absorption costing results in a higher cost per unit.

Given the Following Data, Total Product Cost Per Unit Under