Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

The information below concerns a business in its first year of trading. Production: $5000$ units Sales: $4000$ units Unit selling price: $10$ Variable production cost per unit: $4$ Selling expense per unit: $1$ Total fixed manufacturing overhead: $13000$ What is the amount of gross profit if the business uses absorption costing to value its inventory?

  • A$7000$
  • B$11000$
  • C$13600$
  • D$20000$

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