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Which is the correct formula to calculate product costs under absorption costing? Direct materials + direct labour + fixed manufacturing overhead O Direct materials + direct labour + variable manufacturing overhead + fixed manufacturing overhead Direct materials + direct labour + variable manufacturing overhead Direct materials + direct labour + allocated manufacturing overhead Which of the following is not an advantage of variable costing? o Under variable costing, operating income for a period is not affected by changes in inventories, which makes it easier for managerial accountants to make decisions and correctly interpret results. Cost-volume-profit (CVP) analysis can be performed to make important decisions using the contribution margin income statement. O Variable costing facilitates contribution margin and profitability analysis by products, customers, and other business segments. O Many management teams decide to use variable costing for external as well as internal reporting as it is easier to maintain only one costing system. Which of the following activities would be considered a unit-level activity? Processing a customer order O Sales calls and technical support O Product design O Providing power to run machinery to produce a product

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