Answer:
True.
Explanation:
Giving the following information:
Direct labor $1.50 per unit
Direct materials $1.50 per unit
Overhead:
Total variable overhead $900,000
Total fixed overhead $1,200,000
Expected units to be produced 3,000 units
The difference between the absorption and variable costing methods is that the first one allocates the fixed manufacturing overhead to its production cost.
The difference will be:
Unitary fixed overhead= 1,200,000/3,000= $400 per unit
