A-LevelAccountingTraditional costing methods9706/12 · Oct/Nov 2015 · Q291 Mark

A business produces a single product. | | number of units | |---|---| | opening inventory | 5000 | | production | 15000 | | closing inventory | 2000 | The variable production cost per unit is $10 and the fixed production cost is $60000. The sales revenue is $360000. Profit is $108000 based on full absorption costing. What is the profit based on marginal costing?

A$8000 higher

B$8000 lower

C$12000 higher

D$12000 lower

✓ Correct answer

C: $12000 higher

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2015 Paper 1 Variant 2, question 29.

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