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Question 1: Lord Industries manufactures a single product. Variable production costs are P10 and fixed production costs are P75,000. Lord uses a normal activity of 10,000 units to set its standard costs. Lord began the year with no inventory, produced 11,000 units and sold 10,500 units. The volume variance under each product costing are:
A. B. C. D.
Under Absorption Costing P3,750 P3,750 P7,500 P7,500
Under Variable Costing P0 P7,500 P0 P0
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