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The overhead absorption rate for Prado is $80 per direct labour hour. Each unit of Prado requires 6 direct labour hours. Opening stock of Prado

The overhead absorption rate for Prado is $80 per direct labour hour. Each unit of Prado requires 6 direct labour hours. Opening stock of Prado is 500 units and closing stock is to be 400 units. What is the difference in the profits reported in the month using absorption costing compared with marginal costing? The absorption costing profit would be:

a.

$48,000 less

b.

$192,000 greater

c.

$240,000 less

d.

$48,000 greater

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