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ABC Ltd makes widgets. It has no opening inventory and the closing inventory is 500 units. The budgeted and actual fixed manufacturing costs are $1,000 and the budgeted and actual production is 2,000 units.
The variable manufacturing cost was $2 per unit and the selling price was $8 per unit. Sales commissions of 4.5% of sales revenue are paid to sales people.
Other non-manufacturing fixed costs total $500.
Question 1: What is the profit under absorption costing?
Select one:
Option 1: $7,210
Option 2: $7,460
Option 3: $6,960
Option 4: $7,710
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