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What would be the effect on income from operations

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Question: The level of inventory of a manufactured product has increased by 7,000 units during a period. The following data are also available:

                                                                    Variable              Fixed

Unit manufacturing costs of the period                 $12.00               $6.00

Unit operating expenses of the period                     4.00                 1.50

What would be the effect on income from operations if absorption costing is used rather than variable costing? By how much it would increase or decrease?

Reference no: EM131760009

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