Absorption costing and marginal costing profits

The question is not asking you to calculate the profits - that is impossible here because there is not enough information. Instead it is asking which profits are consistent with the data - i.e. which combination of profits is possible. Assuming that you have watched my free lectures, then you will know that in month 1, the absorption profit will be higher than the marginal profit because they produced more than they sold. In month 2, the marginal profit will be higher than the absorption profit because they sold more than the produced. This is the case for only one of the 4 choices available. If you have not watched my lectures on this then do watch them - the lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well :-)

You are welcome :-)