Hamov Torter makes cakes, for which the budgeted costs and profit per unit is as follows:

$

Materials 2

Labour 3

Variable production overheads 3

Fixed production overheads 4

Viariable selling cost 1

Fexed selling overhead 2

Profit 5

Selling price 20

Both types of fixed overheads were based on budget of 10,000 cakes a year

In the fist year of production, the only difference from the budget was that 11,000 cakes were produced, and 9,000 sold. All costs and revenues are in line with budged per unit.

Calculate the profit made under absorption costing system

a.

$ 12,000

b.

$ 1,000

c.

$ 12

d.

$ 47,000