Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

A business produces and sells one product at $12 per batch. The variable cost comes to $4 per batch. Fixed costs have been absorbed using a normal activity level of 1000 batches at $3 per batch. What is the profit under marginal costing if the company makes and sells 1500 batches?

  • A$6000
  • B$7500
  • C$9000
  • D$12000

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