Question

Consider the following information:

Number of units produced: 2,000 units
Number of units sold 1,800 units
Direct materials cost: $8 per unit
Direct labour cost: $12 per unit
Variable manufacturing overhead: $6 per unit
Fixed manufacturing overheads for the period: $8,000
Selling price per unit: $70
Based on the above information, what is the profit under absorption costing system?
4
O a $72,000
O b. $79,200
OC. $66,000
Od $71,200

Answer 1

Answer: a. $72,000.

Explanation:

The profit is the total revenue minus the COGS, which is $126,000 - $54,000 = $72,000.

So, the answer is a. $72,000.