"Unile Auto produces and sells an auto part for $60.00 per unit. In 2015, 100,000 parts were produced and 75,000 units were sold. Other information for the year includes:

Direct materials $20.00 per unit
Direct labor $ 4.00 per unit
Variable overhead costs $ 1.00 per unit
Sales commissions $ 6.00 per part
Fixed overhead costs $ 750,000 per year
Administrative expenses, all fixed $ 270,000 per year"

What is the inventoriable cost per unit using variable costing?

A. $20.00
B. $24.00
C, $25.00
D. $31.00

What is the inventoriable cost per unit using absorption costing?

A. $25.00
B. $31.00
C. $32.50
D. $38.50

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?