Budgeted profit for product b for next month

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A company has budgeted to produce 5,000 units of Product B per month. The opening and closing inventories of Product B for next month are budgeted to be 400 units and 900 units respectively. The budgeted selling price and variable production costs per unit for Product B are as follows:

                                                                                              $ per unit

                   Selling Price                                                         20.00

                    Direct costs                                                          6.00 

                    Variable production overheard costs                               3.50

Total budgeted fixed production overheads are $29,500 per month.

The company absorbs fixed production overheads on the basis of the budgeted number of units produced. The budgeted profit for Product B for next month, using absorption costing, is $20,700.   

Show the marginal costing statement which shows the budgeted profit for Product B for next month.

Reference no: EM132203978

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