Question

Which of the following will always give the highest product cost per unit? A. Variable Costing...

Which of the following will always give the highest product cost per unit?

A. Variable Costing

B. The highest product cost per unit (Absorption, Variable, or Throughput) will depend on the number of units budgeted.

C. Throughput Costing

D. Absorption Costing
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Answer #1

Variable costing covers all the variable manufacturing cost for the product cost.It does not considers the fixed manufacturing overheads.

Throughput costing considers only direct materials as the product cost.It does not include labour and other overhead costs related to production.

Absorption costing covers all the manufacturing cost of production for the product cost. It also include Fixed manufacturing cost.

So it is clear that Absoprtion costing will give the highest product cost.

Therefore the answer is optin D i.e Absorption Costing.

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