Answer:
Cost per unit under variable costing $
Direct material 110
Direct labour 150
Variable manufacturing overhead 75
Cost per unit 335
Cost per unit under absorption costing $
Direct material 110
Direct labour 150
Variable manufacturing overhead 75
Fixed manufacturing overhead ($2,700,000/90,000) 30
Cost per unit 365
Explanation:
In variable costing, cost per unit is calculated by the addition of all variable costs while in absorption costing, fixed manufacturing overhead application rate is added to the variable costs in order to obtain the cost per unit.
