ABC Company uses the FIFO method for costing its inventory. During the year it has...
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Accounting
ABC Company uses the FIFO method for costing its inventory. During the year it has the following information:
Opening inventory 300 units
Units produced 600
Units sold 600
Prior year fixed overhead costs $50 per unit
Current-year fixed overhead costs $44 per unit
Instructions
Calculate the difference between operating income in the current year if the company uses variable vs. absorption costing. Explain why this difference occurs in 1-2 sentences.
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