Asked by Jeeva Senthilnathan on May 13, 2024
Verified
Given the following data,total product cost per unit under absorption costing is $9.14.
Absorption Costing
A method of product costing that includes all manufacturing costs, both fixed and variable, in the cost of a product.
Total Product Cost
The complete cost of producing a product, including direct materials, direct labor, and both variable and fixed overhead.
- Identify the components that make up total product costs under both costing methods.
Verified Answer
OG
Obaapa GattyMay 19, 2024
Final Answer :
True
Explanation :
Absorption costing includes all manufacturing costs, both fixed and variable, in the cost of a unit of product. Therefore, the total product cost per unit under absorption costing is usually higher than under variable costing, which only includes variable manufacturing costs in the cost of a unit of product. Hence, the given data is plausible under absorption costing.
Learning Objectives
- Identify the components that make up total product costs under both costing methods.
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