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Your company uses absorption costing for preparing its GAAP-based income statement and balance sheet. Management is disappointed because its external auditors are requiring it to

Your company uses absorption costing for preparing its GAAP-based income statement and balance sheet. Management is disappointed because its external auditors are requiring it to write off an inventory amount because the inventory balance exceeds what the company could reasonably sell in the foreseeable future.

Why would management produce more than it sells?

Why would management be disappointed about the write-off?

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