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Unformatted text preview: D. SGA is the same for both E. OPY 1. Variable a) All fixed MOH is deducted from revenue b) Results in a higher OPY when inventory is lost because absorption costing takes extra MOH from the balance sheet and expenses it 2. Absorption a) Only fixed MOH for the units sold is deducted from revenue b) Results in a higher OPY when building inventory because not all MOH has been expensed F. Ending inventory 1. BI + produced – sold = EI x unit product cost 2. Usually greater under absorption because variable unit cost does not include fixed MOH but absorption variable cost does IV. Overtime (once all units produced are sold) there is no difference between reporting OPY using variable or absorption costing...
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This note was uploaded on 02/09/2012 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.
- Fall '10