UNIT 8 $6,860 ($9,800 X .70) COST OF NEXT 7 UNITS = (8 X $6,860...

172. Correct answer d. Xylon’s internal income figures would vary closely with sales because

fixed overhead costs are treated as period costs when using variable costing. Under

absorption costing, all overhead costs are attached to the units produced; there, some fixed

costs are inventoried for those units produced but not sold.