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Which production costs are included as product (inventory) costs under Absorption Costing but immediately expensed under Variable Costing? Because of the difference above, Variable Costing

  1. Which production costs are included as product (inventory) costs under Absorption Costing but immediately expensed under Variable Costing?
  2. Because of the difference above, Variable Costing and Absorption Costing will often report different profits for the same period. Explain this dynamic. When will the two systems differ in the reported profit? Why does this result?

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