Finlandia Frankfurters (FF), incorporated in Finland, uses variable costing for external reporting. On 1st January, it is purchased by Belgian Bagels, which uses absorption costing, and FF is obliged to adopt the parent company's accounting method for the purposes of filing consolidated accounts. At the time of the merger, FF had 4,000 units in inventory and production costs remained stable over the following year. What is FF's income in the first post-merger year?

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To calculate FFs income in the first postmerger year using absorption costing youll ... View the full answer