PFA Ltd Uses a Throughput Costing System and Reported the Following

Multiple Choice

PFA Ltd uses a throughput costing system and reported the following information for its first month of operations: Units produced…………………………………..140
Units sold………………………………………..120
Material cost per unit produced……………….$3.50
Conversion cost per unit produced……………$6.50
Fixed period costs per unit produced………….$6.00
Variable period costs per unit produced………$4.00
Selling price per unit…………………………$25.00
Under which of the following costing methods would PFA report the highest operating profit?

A) Absorption costing
B) Variable costing
C) Throughput costing
D) Profit will be equal under all three methods