costing Charged to expense for the year, assuming the use of absorption 6) Income statement absorption costing Vs direct costing Question # 4: As part of its investigation regarding the possible adoption of direct costing, the management of the Garcia Company asks the controller what effect the adoption of such procedures would have on inventories. In developing the answer to this question, the following figures, representing operations for the past year, are used: Units produced 50.000, of which 15,000 were not sold. 35.66 wike sold Direct materials $200.000 Direct labor 260,000 Factory overhead: Variable expenses 150.000 Fixed expenses 75.000 Required: (1) The cost to be assigned the 15,000 units in inventory using absorption costing. (2) The cost to be assigned the 15,000 units in inventory using direct costing, Question # 5: The following information is available for Shan Corporation's new