What is the total manufacturing profit?

Total production cost- #360,000
Factory overhead cost- #56,000
Selling price per unit- # 120
Production volume of 4000 units

 

A. #64,000
B. #120,000
C. #360,000
D. #480,000

Correct Answer:

Option B – #120,000

Explanation

selling price x production volume
120 x 4000 = 480,000

Total sales – cost of production

480,000 – 360,000 = 120,000 (profit)