Q1. The following information are taken away from the books of Nehemiah Company, which assumes first-in, first-out (FIFO) for inventory cost flow:

Inventory (in units)20192020

Beginning inventoryNone?

Production10,000 units9,000 units

Ending inventory3,500 units1,000 units

Sales (P 2 per unit)? ?

Variable manufacturing costs (P0.75 per unit)P7,500P6,750

Fixed manufacturing costs P5,000P5,400

Selling and administrative expenses (50% variable)P4,500P7,500

Required:

1. Determine 2019 profit under variable and absorption costing.
2. Determine 2020 profit under variable and absorption costing.