Question: A company has the same variable costs per unit, the same fixed costs in total, and the same selling price in Years 1 and

A company has the same variable costs per unit, the same fixed costs in total, and the same selling price in Years 1 and 2. Production and sales volume for the 2 years are as follows: Year 1 Year 2 Production (in units) Sales (in units) 50,000 40,000 30,000 40,000 The company uses FIFO to cost all inventories. The beginning Finished Goods Inventory for Year 1 was zero. Which year would give the highest net income figure using absorption costing?

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The year with the higher production volume Year 1 50000 units will have the higher net income figure using absorption costing Heres why Absorption cos... View full answer

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