Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A producer manufactures one product only. It is sold at $240 for each batch. Variable cost comes to $80 per batch. Fixed costs have been absorbed using a normal activity level of 1000 batches at $60 per batch. What profit will the business earn if it produces and sells 1250 batches?

  • A$100000
  • B$125000
  • C$140000
  • D$200000

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