A company has the following budgeted costs and revenues:

In the most recent period, 2000 unit were produced and 1000 units were sold.
Actual sales price, variable production cost per unit and total fixed production costs were all as budgeted. Fixed production costs were over absorbed by $4000. There was no opening inventory for the period.
What would be the reduction in profit for the period if the company had used marginal costing rather than absorption costing?

(a) $4000

(b) $6000

(c) $10000

(d) $14000 (2 marks)
ACCA F2 Management Accounting

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Sales price Variable production cost Fixed production cost $ per unit 50 18 10