EXERCISE 7-9 (20 MINUTES)

1. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH07 VARIBLE COSSTING TOOL FOR MANAGEMENT
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH07 VARIBLE COSSTING TOOL FOR MANAGEMENT

1. a. and b. Absorption

Costing Variable

Costing

Direct materials ... $ 7 $ 7

Direct labor ... 10 10

Variable manufacturing overhead ... 5 5

Fixed manufacturing overhead

($315,000 ÷ 17,500 units) ... 18 —

Unit product cost ... $40 $22