Answer to Question #260536 in Microeconomics for Axl

Question

II. Assume the following prices of Good Y and the quantities purchased at these prices. The Total Fixed Cost of the firm is P6,000 and the cost of Direct Materials is P0.80 per unit and that of direct labor is P1.10 per unit. Complete the table.

Answer 1

Given the following data, the total product cost per unit under absorption costing will be greater than the total product cost per unit under variable costing.

Direct labor  P 1.10 per unit

Direct material P 0.80 per unit

Total fixed cost P 6,000