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Question 1.
Is a variable costing income statement applicable to service operations?
a. If so, provide a hypothetical example of variable costing income statements in a service operation.
b. Explain your example in detail and provide in-text citations.
Question 2.
Explain the difference between variable costing and absorption costing income statements.
a. Provide a hypothetical income statement in both formats in which the number of units sold is different from the number of units manufactured.
b. Explain the contrast between the two formats.
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