How much greater will ABC Enterprises profit

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Question - ABC Enterprises had the following cost and production information for October:

Units Produced 20,000

Units Sold 17,000

Unit Sales Price $200

Manufacturing Cost Per Unit Direct Material $50

Direct Labor $25

Variable Manufacturing Overhead $10

Fixed Manufacturing Overhead ($500,000/20,000) = $25

Full Manufacturing Cost Per Unit $110

Non manufacturing Costs Variable Selling Expenses $80,000

Fixed General and Administrative Costs $75,000

Required - How much greater will ABC Enterprises' profit be under absorption costing than under variable costing?

a. $425,000

b. $75,000

c. $60,000

d. $500,000

Reference no: EM132819282

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