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A newly formed company has drawn up the following budget for its first accounting period: Sales units 9 500 Production units (normal capacity) 10 000
A newly formed company has drawn up the following budget for its first accounting period:
Sales units | 9 500 |
Production units (normal capacity) | 10 000 |
Selling price per units, $ | 6.40 |
Variable cost per unit | 3.6 |
Fixed production overhead per period | 15 000 |
In this period, the budgeted profit will be:
(i) the same under both absorption costing and marginal costing;
(ii) $750 higher under marginal costing;
(iii) $750 higher under absorption costing;
(iv) $1400 higher under absorption costing.
Prove with calculation
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