Sony makes MP3 players and uses both absorption and variable costing. Assume Sony incurred the following manufacturing costs in producing 10,000 MP3 players last month:

1. What is the product cost per unit, using absorption costing?
2. How will fixed MOH be expensed if absorption costing is used?
3. What is the product cost per unit, using variable costing?
4. How will fixed MOH be expensed if variable costing is used?

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Manufacturing Costs Direct materials Total Cost $ 70,000 40,000 Direct labor Variable MOH Fixed MOH Total Per Unit Cost $ 7.00 4.00 90,000 9.00 120,000 12.00 $320,000 $32.00