Columbia Company's variable costing income statement for November appears below:
-Under absorption costing, for the month ended November 30 the company would report a;

A)£145,000 profit.
B)£125,000 profit.
C)£125,000 loss.
D)£120,000 profit.

Question

Columbia Company's variable costing income statement for November appears below:
-Under absorption costing, for the month ended November 30 the company would report a;

A)£145,000 profit. 
B)£125,000 profit. 
C)£125,000 loss. 
D)£120,000 profit.

Quizplus · Accepted Answer

Under absorption costing, fixed manufacturing overheads are included in the cost of goods sold, which affects the profit calculation. The correct profit figure is £125,000.

Columbia Company's Variable Costing Income Statement for November Appears Below