1.

ABSORPTION COSTING

Product Cost includes Direct Materials, Direct Labor, Variable Manufacturing Overhead and
Fixed Manufacturing Overhead.

Unit Product Cost = Direct Materials + Direct Labor + Variable Manufacturing Overhead +
Fixed Manufacturing Overhead
Unit Product Cost = 100,000 + 320,000 +40,000 + (60,000,000/250) = 100,000 + 320,000
+40,000 + 240,000

Unit Product Cost = 700,000/gamelan

2. VARIABLE COSTING

Product Cost includes Direct Materials, Direct Labor, and Variable Manufacturing Overhead.

Unit Product Cost =  Direct Materials + Direct Labor + Variable Manufacturing Overhead

Unit Product Cost = 100,000 + 320,000 +40,000

Unit Product Cost = 460,000/gamelan

Thank you very much