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Butler, Inc. just finished its second year of operations. In the first year it produced 1,000 units and sold 400. The second year resulted in

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Butler, Inc. just finished its second year of operations. In the first year it produced 1,000 units and sold 400. The second year resulted in the same production level, but sales were 1,200 units. The variable costing income statements for both years are shown below: Year 1 Year 2 Sales $40,000 $120,000 Variable cost of goods sold $22,000 $66,000 Variable selling and administration _800 22.800 2.400 68.400 Contribution margin 17,200 51,600 Fixed manufacturing overhead 20,000 20,000 Fixed selling and administration 15,000 35,000 15.000 35.000 Operating income $(17,800 $ 16,600 The ending inventory for year 2 using absorption costing would be: A. $34,000 B. $30,000 C. $22,000 D. $51,000

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