Given the following data,total product cost per unit under variable costing will be greater than total product cost under absorption costing.
$\begin{array}{|l|l|}
\hline \text { Direct labor } & \$ 2 \text { per unit } \
\hline \text { Direct materials } & \$ 8 \text { per unit } \
\hline \text { Overhead } & \
\hline \text { Total variable overhead } & \$ 37,500 \
\hline \text { Total fixed overhead } & \$ 249,000 \
\hline & \
\hline \text { Expected units to be produced } & 15,000 \text { units } \
\hline
\end{array}$

Question

Given the following data,total product cost per unit under variable costing will be greater than total product cost under absorption costing.
 $\begin{array}{|l|l|}
\hline \text { Direct labor } & \$ 2 \text { per unit } \
\hline \text { Direct materials } & \$ 8 \text { per unit } \
\hline \text { Overhead } & \
\hline \text { Total variable overhead } & \$ 37,500 \
\hline \text { Total fixed overhead } & \$ 249,000 \
\hline & \
\hline \text { Expected units to be produced } & 15,000 \text { units } \
\hline
\end{array}$

Quizplus · Accepted Answer

Under variable costing, only variable costs are included in product costs, while under absorption costing, both variable and fixed overheads are included. Therefore, total product cost per unit under absorption costing will be greater than under variable costing.

Given the Following Data,total Product Cost Per Unit Under Variable