=+2-33 K Absorption and variable costing (CMA adapted) OBJECTIVE 6 Osawa Ltd planned and actually manufactured 200000 units of its single product in 2012, its first year of operation. Variable manufacturing cost was $20 per unit produced. Variable operating (non-manufacturing) cost was $10 per unit sold. Planned and actual fixed manufacturing costs were $600000. Planned and actual fixed operating (non-manufacturing) costs totalled $400000.

Osawa sold 120000 units of product at $40 per unit.

Required 1 Osawa’s 2012 operating profit using absorption costing is:

(a) $440000,

(b) $200000,

(c) $600000,

(d) $840000, or

(e) none of these. Show supporting calculations.