1. In producing a tangible good, a manufacturing company incurs the following costs per unit: Cost item Amount Direct material $5.50 Direct labour $3.75 Variable manufacturing overhead $2.25 Fixed manufacturing overhead $1.50 Calculate product cost per unit under absorption costing.

2. In producing a tangible good, a manufacturing company incurs the following costs per unit: Cost item Amount Direct material $5.50 Direct labour $3.75 Variable manufacturing overhead $2.25 Fixed manufacturing overhead $1.50 Calculate product cost per unit under variable costing.

3. Continuing on from exercise 3.4, if the company was to produce 7,500 units and sell none, how much would be reported on the balance sheet under finished goods inventory, and how much would be reported on the income statement?