Answer the Following Questions Using the Information Below:
Queanbeyan Company

question 130

Multiple Choice

Answer the following questions using the information below:
Queanbeyan Company incurred fixed manufacturing costs of $7200 during 2018.Other information for 2018 includes:
The budgeted denominator level is 800 units.
Units produced total 1000 units.
Units sold total 950 units.
Beginning inventory was zero.
The fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold.
-Mt Panorama Company has the following information for the current year:
$\begin{array}{lr}\text { Beginuing fixed manufacturing overhead in inventory } & \$ 95,000 \\\text { Fixed manufacturing overhead in production } & 375,000 \\\text { Ending fixed manufacturing overhead in inventory } & 25,000\\\\\text { Begintuing variable manufacturing overhead in inventory } & \$ 10,000 \\\text { Variable manufacturing overhead in production } & 50,000 \\\text { Ending variable manufacturing overhead in inventory } & 15,000\end{array}$
What is the difference between operating profits under absorption costing and variable costing?

• A)$70 000
• B)$50 000
• C)$40 000
• D)$5000

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