Keats started operation on Mar1 making one product, their standard cost were:

$

Direct Labor 5

Direct Material 8

Variable Production OVH 2

Fixed Production OVH 5

Standard Production cost = 20.

The fixed production OVH has been calculated on basis of a budget normal output of 36,000 units per year.

Assume that actual fixed OHV are as expected, and all budgets' fixed expenses are incurred evenly over the year.

Selling, distribution and adm exp are

Fixed $120,000 per

Variable 15% of sales value

Selling price per unit is $35, and units produced and sold are:

per units Mar Apr

Production 2,000 3,200

Sales 1,500 3,000

1) prepare profit statement for each month using absorption and marginal costing

Q) Using absorption costing is amounts is the over(under) OVH for Mar?

a) $(5000)

b) $(1,000)

c) $1,000

d) $5,000