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Hi,
I would like to ask How production equals sales volume in the Longer run to acheive the same profit under both Margional and Absorption costing?
From year to year production may not equal sales because on inventory.
However the closing inventory of one year is the opening inventory of the following year.In the long run, production must equal sales because otherwise they would be building up inventory for no reason which would not happen.
This is more F2 than F5 and the free F2 lectures on marginal and absorption costing make this clear.
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