Question

The manufacturing cost per unit for absorption costing is:

Select one:
a. usually, but not always, higher than manufacturing cost per unit for variable costing.
b. usually, but not always, lower than manufacturing cost per unit for variable costing.
c. always higher than manufacturing cost per unit for variable costing.
d. always lower than manufacturing cost per unit for variable costing.

Answer 1

Always higher than manufacturing cost per unit for variable costing.

Step-by-step explanation:

Absorption costing continuously contains fixed overheads similarly while computing the manufacturing cost.

Conversely, under variable costing only adjustable overheads were included.

Thus, the manufacturing cost under absorption costing method is always higher than variable costing method

Therefore, per unit cost will always be higher under absorption costing than in variable costing.

So, option C is the correct option