Enter the relevant amounts for each of the three years from Exhibit 41.3 in the columns labelled 1 to 3 in the following table:

Assume that in Year 4, Burke Ltd‘s costs per unit and fixed costs were unchanged from Year 3. Production in Year 4 was 40,000 units and all inventory was sold.
Enter the appropriate amounts for that year into the table. Finally, add up the four values for gross profit per marginal costing and the four values for gross profit per absorption costing and place the two totals in the totals column. What does this tell you about the difference in long-term gross profit of using one of these valuation bases rather than the other?

Exhibit 41.3

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Gross profit per marginal costing Add: Closing absorption cost inventory - Closing marginal cost inventory Less: Opening absorption cost inventory - Opening marginal cost inventory Gross profit per absorption costing 1 2 3 4 Total