What the profit reported under absorption costing was

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Z Limited manufactures a single product, the budgeted selling price and variable cost details of which are as follows:

N$

Selling price 15.00

Variable cost per unit:

Direct materials 3.50

Direct labour 4.00

Variable overhead 2.00

Budgeted fixed overhead cost are N$60 000 per annum, charged at a constant rate each month. Budgeted production is 30 000 units per annum.

Question 1: In a month when actual production was 2 400 units and exceeded sales by 180 units the profit reported under absorption costing was:

Select one:

a. N$7 570

b. N$6 660

c. N$8 400

d. N$8 200

e. N$7 770

Reference no: EM132549651

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