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b . What is the reason for the difference in operating income reported for the two levels of production by the absorption costing income statement?

b. What is the reason for the difference in operating income reported for the two levels of production by the absorption costing income statement?
The increase in operating income under absorption costing is caused by the allocation of
overhead cost over a
number of units.
Thus, the cost of goods sold is
. The difference can also be explained by the amount of
overhead cost included in the
inventory.
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