Figure 8-6. Bailey Company incurred the following costs in manufacturing desk calculators:

Direct materials	$18
Indirect materials (variable)	3
Direct labor	9
Indirect labor (variable)	7
Other variable factory overhead	13
Fixed factory overhead	34
Variable selling expenses	26
Fixed selling expenses	12

During the period, the company produced and sold 2,000 units.

5. Refer to Figure 8-6. What is the inventory cost per unit using absorption costing?

	a.	$104
	b.	$77
	c.	$84
	d.	$32

6. Refer to Figure 8-6. What is the inventory cost per unit using variable costing?

	a.	$52
	b.	$66
	c.	$72
	d.	$50

Figure 8-7. Ramon Company reported the following units of production and sales for June and July:

	Units
Month	Produced	Sold
June	100,000	90,000
July	100,000	105,000

Income under absorption costing for June was $40,000; income under variable costing for July was $50,000. Fixed costs were $600,000 for each month.

7. Refer to Figure 8-7. How much was income for July using absorption costing?

	a.	$50,000
	b.	$20,000
	c.	$80,000
	d.	$40,000

8. Refer to Figure 8-7. How much was income for June using variable costing?

	a.	$40,000
	b.	$20,000
	c.	$(40,000)
	d.	$(20,000)