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A company manufactures a single product and reports profits under both marginal ...
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A company manufactures a single product and reports profits under both marginal and Full (absorption) costing.
Data for the month: • Selling price: £55 per unit • Variable production cost: £32 per unit• Budgeted fixed production overhead: £160,000 per month• Normal activity level used to set the OAR: 20,000 units per month • Actual fixed production overhead incurred: £170,000• Fixed non-production costs: £60,000 per month
Operational data: Production 22,000 units; Sales 19,000 units; No opening inventory.
Which pair of monthly profits is correct?
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