Mona reported $65,000 in net profit for the year using absorption costing. The company had no units in beginning inventory, planned and actual production was 20,000 units and sales were 18,000 units during the year. Variable manufacturing costs were $20 per unit and total budgeted fixed manufacturing overhead was $100,000. There was no underapplied or overapplied overhead reported during the year. Determine the net profit under variable costing. A. $115,000 B. $75,000 C. $65,000 D. $55,000

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
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Mona reported $65,000 in net profit for the year using
absorption costing. The company had no units in beginning
inventory, planned and actual production was 20,000 units
and sales were 18,000 units during the year. Variable
manufacturing costs were $20 per unit and total budgeted
fixed manufacturing overhead was $100,000. There was no
underapplied or overapplied overhead reported during the
year.
Determine the net profit under variable costing.
A. $115,000
B. $75,000
C. $65,000
D. $55,000
Transcribed Image Text:Mona reported $65,000 in net profit for the year using absorption costing. The company had no units in beginning inventory, planned and actual production was 20,000 units and sales were 18,000 units during the year. Variable manufacturing costs were $20 per unit and total budgeted fixed manufacturing overhead was $100,000. There was no underapplied or overapplied overhead reported during the year. Determine the net profit under variable costing. A. $115,000 B. $75,000 C. $65,000 D. $55,000
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