Mathematics · Absorption vs Marginal Costing
A company uses an absorption costing system. It has a variable cost of $5 per unit and absorbs fixed production overhead at $3 per unit. In a period when 1,800 units of product were sold and 2,000 units were produced, it recorded an operating profit of $3,600. What would its operating profit have been if it had used a marginal costing system?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$2,600
- 2$3,000✓
- 3$4,200
- 4$4,600
Correct answer
$3,000
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