Editing Unit Cost Computations, Unit product cost is determined as follows: Absorption Variable Costing Costing Direct materials, direct labour, and variable mfg, overhead $ 10 $ 10 Fixed mfg. overhead ($150,000 + 25,000 units) Unit product cost 16 S 10 Under absorption costing, selling and administrative expenses are always treated as period expenses and deducted from revenue as incurred. 6