The following data has been extracted from last quarter's budget of Elise Ltd, which manufactures and sells
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Question:
The following data has been extracted from last quarter's budget of Elise Ltd, which manufactures and sells a single product.
January | February | March | |
Production units | 6200 | 6200 | 5800 |
Sales units | 5900 | 6000 | 5500 |
The variable production cost per unit is $40 and each unit incurs 1 hour and 30 minutes of labour. Fixed production overhead to be absorbed in each unit has already been calculated and is $20 per labour hour. In February, Elise Ltd, recorded a loss of $4,000 under marginal costing principles.
What would have been the budgeted profit or loss figure in February if Elise Ltd used absorption costing principles instead?
A. Profit of $3,000
b. Loss of $10,000
c. Profit of $2,000
d. loss of $1,000
Related Book For
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
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