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Assignment Questions

Variable vs. Absorption Costing Whether to use

Write a paper of no more than 350 words after completing Exercise 19-17 in WileyPLUS in which you respond to the following questions:
? In this case, would it be better to use the variable or absorption costing method, and why?
? What are the benefits of the two methods?
? Which method would lead to the best decision when a competitor is submitting a lower bid for your product?

Resource:
*BE19-16 Compute product costs under variable costing.
(SO 6), AP
Montana Company produces basketballs. It incurred the following costs during the year.
Direct materials $14,490
Direct labor $25,530
Fixed manufacturing overhead $10,000
Variable manufacturing overhead $32,420
Selling costs $21,000

What are the total product costs for the company under variable costing?
*BE19-17 Compute product costs under absorption costing.
(SO 6), AP
Information concerning Montana Company is provided in *BE19-16. What are the total product costs for the company under absorption costing?

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