Question 1 1. a. The unit product cost under absorption costing would be: Direct materials. Direct labor...... Variable manufacturing overhead.. Total variable costs... Fixed manufacturing overhead (RM400,000 25,000 units).. Absorption costing unit product cost. b. The absorption costing income statement: Sales (20,000 units x RM60 per unit). RM 7 10 3 20 16V RM36V (5 marks) ON Cost of goods sold (20,000 units x RM36 per unit). Gross margin.. Selling and administrative expenses [(20,000 units RM4 per unit) + RM190,000]. Net operating income. RM1,200,000 720,000 480,000 270,000 RM 210,000 (5 marks)