Requirement $4.$ Tim

BerknerBerkner

is$$ concerned: He notes that despite an increase in sales over

$20192019,$

$20202020$

operating income has actually declined under absorption costing. Explain how this occurred.

Under absorption$$ costing, operating income is a function of

both sales and production.

During

$20202020,$

SweeneySweeney

experienced a

large decrease

in inventory levels as a result of

decreased production.

The end result was that much of

$$

$$