Unit 5 - Variable and Absorption Costing 1 Use the following information to answer a & b Number of units produced in the year 3000 Variable costs incurred Direct Materials 3000 Direct Labour 6 000 Variable Manufacturing Overhead 3000 Variable Selling and administrative expenses 9000 Fixed Costs per year Fixed Manufacturing Overhead Fixed Selling and Administrative Expenses 15 000 10 000 a Calculate the product unit cost using the variable costing method b Calculate the product unit cost using the absorption costing method 2 During the current year J Company produced 8 000 phones and sold 5 000 phones. The fixed manufacturing overheads allocated per unit were R5. Calculate the deferred fixed overheads in inventory. 3 Discuss three advantages of the Variable Costing Approach over the Absorption Costing Approach