Which of the following statements is true regarding absorption costing?

a$)$ It treats only variable manufacturing costs as product costs.

b$)$ Fixed manufacturing overhead is expensed in the period incurred.

c$)$ It is not allowed for external reporting purposes.

d$)$ It may result in inventory carrying costs being higher or lower than they would be under variable costing.

What happens to the contribution margin when selling price per unit increases?

a$)$ Contribution margin per unit increases.

b$)$ Contribution margin per unit decreases.