2. Under variable costing, only the variable manufacturing costs are in-
cluded in product costs.
Direct materials ... Rp100
Direct labor ... 320
Variable manufacturing overhead ... 40
Unit product cost ... Rp460
Note that selling and administrative expenses are not treated as product
costs under either absorption or variable costing; that is, they are not
included in the costs that are inventoried. These expenses are always
treated as period costs and are charged against the current period’s
revenue.
© The McGraw-Hill Companies, Inc., 2006. All rights reserved.
Solutions Manual, Chapter 7 349
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