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Variable cost and absorption cost Dundee makes cakes provides the following information: $ Materials/unit 2 Labour/unit 3 Variable production overhead/unit 3 Total fixed production overhead

Variable cost and absorption cost

Dundee makes cakes provides the following information:

$
Materials/unit 2
Labour/unit 3
Variable production overhead/unit 3
Total fixed production overhead 40,000
Variable selling cost/unit 1
Total fixed selling and admin expense 20,000

Selling price per unit: $20

Required:

  1. What is the unit product cost using variable costing?
  2. What is the unit product cost using absorption costing?
  3. What is the operating income using absorption costing?
  4. What is the operating income using variable costing?
  5. Reconcile operating incomes of 2 costing methods.

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