Brady Ltd Uses a Normal Absorption Costing System in Which

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