7-9 Inventory decreased. The decrease re-
for the purposes of matching costs and reve-
sulted in fixed manufacturing overhead cost be-
nues.
ing released from inventory and charged against
income as part of cost of goods sold. This added
fixed manufacturing overhead cost resulted in a
© The McGraw-Hill Companies, Inc., 2006. All rights reserved.
Solutions Manual, Chapter 7 347
loss even though the company operated at its
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