I. Absorption costing and over-production Under absorption costing, a company had the following per unit costs when 10,000 units were produced. Direct labor. $2 Direct material 3 Variable overhead... 4 Total variable cost... 9 Fixed overhead ($50,000/10,000 units).. 5 Total production cost per unit.. $14 1. Compute the companys total production cost per unit if 25,000 units had been produced. 2. Why might a manager of a company using absorption costing produce more units than can currently be sold