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I wanted to clarify the process of computing product costs using both methods as follows:
 

                                                                                    Variable Costing         Absorption Costing


Variable manufacturing cost per unit produced:


            Direct material                                                $2,000                         $2,000            


            Direct labor                                                        $200                            $200


            Manufacturing overhead                                    $400       $2,600          $400       $2,600


Fixed manufacturing cost per unit                                                      ----                            $200


Total inventoriable cost per unit produced                                   $2,600                         $2,800

 
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