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
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Chapter7: Variable Costing For Management analysis
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Problem 9E: The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the...
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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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