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Variable vs.

Absorption Costing

Unit product costs differ between variable and absorption costing. For example, Konnor Company produces a single product. Relevant information is as follows: Number of units produced Number of units sold #elling price per unit &ariable costs per unit: 'irect materials, 'irect labor, and &ariable manufacturing over(ead #elling and administrative expense Fixed costs per year: *anufacturing over(ead #elling and administrative expenses !,""" ",""" $%" $)" $% $)!",""" $)"","""

Re+uired: ). 'etermine bot( t(e variable and absorption costs per unit. . ,repare comparative income statements using bot( costing met(ods. -it( t(e variable costing income statement use t(e contribution format, and wit( t(e absorption costing income statement use t(e traditional format. %. Compute Konnor.s brea/0even point in units. Round your answer to t(e next w(ole unit. 1. ,repare two new income statements, bot( variable and absorption, at t(e brea/0 even level of sales. !. 'iscuss t(e results.