Question: The following table shows the inventory balances in units for

The following table shows the inventory balances, in units, for years 1, 2, and 3. Total fixed manufacturing costs were $30,000 for each of the last five years. The units in Year 1 beginning inventory were based on production of 500 units.


Required
For each year, calculate the difference between absorption costing and variable costing operating income. Be sure to indicate which costing system has the higher netincome.


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  • CreatedFebruary 21, 2014
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