A company has established a marginal costing profit of $72,300. Opening inventory was 300 units and closing inventory is 750 units. The fixed production overhead absorption rate has been calculated as $5/unit.What was the profit under absorption costing?
A、$67,050
B、$70,050
C、$74,550
D、$77,550
A、$67,050
B、$70,050
C、$74,550
D、$77,550
【参考答案及解析】
If inventory levels increase in a period, absorption costing will show a higher profit than marginal costing. Difference in profit = change in inventory levels x overhead absorption rate per unit =(750 units - 300 units) x $5 per unit =450 units x $5=$2,250 $ Marginal costing profit 72,300 Increase in profit 2,250 Absorption costing profit 74,550
If inventory levels increase in a period, absorption costing will show a higher profit than marginal costing. Difference in profit = change in inventory levels x overhead absorption rate per unit =(750 units - 300 units) x $5 per unit =450 units x $5=$2,250 $ Marginal costing profit 72,300 Increase in profit 2,250 Absorption costing profit 74,550