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A company manufactures and sells a single product. Next year the budgeted total fixed production costs are $480,000, budgeted sales are 24,000 units and budgeted production is 25,000 units. The budgeted profit for next year using absorption costing principles is $57,500.
What is the budgeted profit for next year using marginal costing principles?
In the answer the closing inventory is lower sales is 24000 and production is 25000 which means marginal profit will be higher but instead off adding 19200 in absorption profit we subtract it why ?
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