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

176. Correct answer a. Using variable costing, fixed overhead is treated as a period cost rather

than a product costs that becomes part of inventory. It can be argued that this is more

appropriate as the fixed costs of equipment, space, etc. should not be inventoried but

expensed annually.