Last month a manufacturing company’s profit was $2000, calculated using absorption costing principles. If marginal costing principles had been used, a loss of $3000 would have occurred. The company’s fixed production cost is

$2 per unit. Sales last month were 10000 units.

What was last month’s production (in units)?

(a) 7500

(b) 9500

(c) 10500

(d) 12500

(2 marks)

ACCA Financial Information for Management