16. LO 6.5 Under variable costing, a unit of product includes which costs? A. direct material, direct labor, and manufacturing overhead B. direct material, direct labor, and variable manufacturing overhead C. direct material, direct labor, and fixed manufacturing overhead D. direct material, direct labor, and all variable manufacturing overhead 17. LO 6.5 Under absorption costing, a unit of product includes which costs? A direct material, direct labor, and manufacturing overhead B. direct material, direct labor, and variable manufacturing overhead C. direct material, direct labor, and fixed manufacturing overhead D. direct material, direct labor, and all variable manufacturing overhead 18. LO 6.5 A downside to absorption costing is: A. not including fixed manufacturing overhead in the cost of the product B. that it is not really useful for managerial decisions C. that it is not allowable under GAAP D. that it is not well designed for cost-volume-profit analysis 19. LO 6.5 When the number of units in ending inventory increases through the year, which of the following is true? A. Net income is the same for variable and absorption costing. B. Net income is higher for variable costing than for absorption costing C. Net income is higher for absorption costing than for variable costing D. There is no relationship between net income and the costing method. 20. LO 6.5 Product costs under variable costing are typically: A higher than under absorption costing B. lower than under absorption costing C. the same as with absorption costing D. higher than absorption costing when inventory increases