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 absorption costing includes both variable and fixed overheads. Therefore, total product cost per unit under variable costing will be less than or equal to that under absorption costing.

Given the Following Data, Total Product Cost Per Unit Under