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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
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