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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
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