A company absorb overheads based on output levels. During the period the company over-absorbed overheads by GH¢6000 based on 5000 budgeted units. The actual overhead cost for the period is GH¢34000....

A company absorb overheads based on output levels. During the period the company over-absorbed overheads by GH¢6000 based on 5000 budgeted units. The actual overhead cost for the period is GH¢34000. The company estimates that the total of direct material and direct labour cot for producing a unit of the product is GH¢50. Which of the following statement is correct?
A. The gross profit will fall as a result of the over-absorption since the prime cost will increase
B. Cost of sales increase hence reducing the net profit
C. The over-absorbed overhead of GH¢6000 will increase the net profit
D. Cannot be determined without further details