Brady Ltd Uses a Normal Absorption Costing System in Which

question 30

Multiple Choice

Brady Ltd uses a normal absorption costing system in which the overhead rate and variable manufacturing costs have remained unchanged for the last 2 years. During the current year the following activity occurred: The firm had no beginning or ending work in process inventories. However, there were 1,000 units in beginning finished goods.
If variable costing had been used, operating profit would be

• A) $27,040
• B) $56,560
• C) $52,960
• D) $45,040