Question: 1. Be able to compute the unit cost under both absorption and variable costing (ie what costs go into each and what are the difference2.

1. Be able to compute the unit cost under both absorption and variable costing (ie what costs go into each and what are the difference2.

  • Does variable or absorption costing produce a higher net income when:
    • units produced equal units sold?
    • units produced is greater than units sold?
    • units produced is less than units sold?
  • Is variable or absorption costing acceptable under GAAP? Which is the better method for short-term decisions?

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