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sir, I don’t understand the reasoning given in the answer for the 2nd statement of how statement 2 is true. can you explain
The valuation of closing inventory using absorption costing includes fixed production overheads.
The valuation using marginal costing does not include fixed production overheads.Therefore marginal costing will always value inventory at a lower amount than absorption costing.
Oh, okay, now I get it its just the twisted statement that confuses people. Thank you, sir, for helping out
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