Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 1

Variable versus absorption costing The following cost behavior patterns describe anticipated manufacturing costs for 2016: raw material, $7/unit; direct labor, $10/unit; and manufacturing overhead, $240,000 + $8/unit.
Required:
If anticipated production for 2016 is 30,000 units, calculate the unit cost using variable costing and absorption costing. Explain the difference.