Absorption Costing Profit with Over-Absorption Adjustment Steps:

• Calculate total fixed costs: 1000 units × $6 absorption rate =$6000.
• For 1250 units made and sold: sales revenue = 1250 × $24 =$30,000; variable costs = 1250 × $8 =$10,000.
• Absorbed fixed costs = 1250 × $6 =$7500; COGS = $10,000 +$7500 = $17,500; initial gross profit =$30,000 - 12,500.
• Over-absorption = $7500 -$6000 = $1500, added to profit:$12,500 + $1500 =$14,000.

Why C is correct:

• Under absorption costing, profit equals variable costing result (contribution $20,000 minus fixed$6000 = $14,000) when production equals sales, via over-absorption adjustment to actual fixed costs.

Why the others are wrong:

• A: Ignores over-absorption, understating by $4000.
• B: Uses absorbed fixed in COGS without over-absorption credit ($12,500 gross profit).
• D: Contribution margin total ($20,000) before deducting fixed costs.

Final answer: C