Vijay reports the following information regarding its production costs

Vijay reports the following information regarding its production costs. Compute its production cost per unit under absorption costing.

Answer:

Per unit costs                   Absorption costing

Direct material                         $10

Direct labor                              $20

Variable overhead                    $10

Fixed overhead                        $8

Total product cost per units     $48

Compute its production cost per unit under variable costing.

Answer:

Per unit costs

Direct material                         $10

Direct labor                              $20

Variable overhead                    $10

Fixed overhead                           -

Total product cost per units     $40