Variable and absorption costing exercises

Calculation of unit product cost under variable costing system and absorption costing system.

Preparation of variable costing income statement; reconciliation of variable costing and absorption costing net operating income figures.

Computation of unit product cost under variable costing system; Computation of break-even point of a manufacturing business.

This exercise explains how to decide the costing method used by the company and the appropriate costing method for external reports?

Income statement under variable costing and absorption costing; explanation of the cause of difference in net operating income figure under two costing approaches.