Hello Carlota,
So, the profit under VC was lower in 5 000€. This is due to the fact that, under FCPC, some of the MFC are accounted as product costs, and since there were 500 unsold units from production, the profits will be different.
You can derive the difference by looking at the MFC attributed to the 500 unsold units.
MFC/unit = 70 000€ / 8 000 = = 8.75€
5 000€ = 8.75 * (8 000 / Practical Capacity) * 500
Practical Capacity = 7 000
Good study!
So, the profit under VC was lower in 5 000€. This is due to the fact that, under FCPC, some of the MFC are accounted as product costs, and since there were 500 unsold units from production, the profits will be different.
You can derive the difference by looking at the MFC attributed to the 500 unsold units.
MFC/unit = 70 000€ / 8 000 = = 8.75€
5 000€ = 8.75 * (8 000 / Practical Capacity) * 500
Practical Capacity = 7 000
Good study!