Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

Using marginal costing, a company made a profit of $\$100\,000$. Its opening inventory stood at $2000$ units, while its closing inventory stood at $3000$ units. The fixed production overhead absorption rate is $\$30$ per unit. What profit would be obtained using absorption costing?

  • A$\$40\,000$
  • B$\$70\,000$
  • C$\$130\,000$
  • D$\$190\,000$

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