Calculate the unit cost of the product using the variable cost method and the full cost method, respectively, and compare the differences and explain the reasons for the differences

The differences are not significant.

Variable cost method: (direct materials + direct labor + variable manufacturing overhead)/production = (80,000 + 20,000 + 20,000)/5000 = $24.

Full cost method: (direct materials + direct labor + variable manufacturing overhead + fixed manufacturing overhead) / production = (80,000 + 20,000 + 20,000 + 30,000) / 5000 = $30.

The unit price under the variable cost method is six dollars less than the unit price under the full cost method because the full cost method takes fixed manufacturing overhead into account. That's (30,000/5,000) = $6 more.

Variable cost method:

Variable cost method, also known as straight-line costing, is the abbreviation of variable costing, refers to the organization's regular costing process, to the premise of cost pattern analysis, only the variable cost of production as a constituent component of the product cost, while the fixed cost of production and non-production costs as a period of cost, and according to contribute to the profit and loss procedures to determine the calculation of profit and loss of a costing model. A costing model.

The variable cost approach is a new model designed by management accounting to reform the traditional costing model of financial accounting.

Complete Costing:

Complete costing is also known as "full costing", "inductive costing" or "absorption costing". The full cost method is to calculate the cost of products and inventory costs, a certain period of time in the production process consumed in the direct materials, direct labor, variable manufacturing costs and fixed manufacturing costs of the full cost are summarized in the cost of products and inventory costs. Since the full cost method absorbs all manufacturing costs, whether fixed or variable, into a unit of product, this method is also known as the "absorption" cost method. Under the full cost method, the unit product cost is directly affected by the production volume, the larger the production volume, the lower the unit product cost, which can stimulate the enterprise to improve the incentive to produce products. However, this method is not conducive to cost management and short-term decision-making