EXERCISE 7-9 (20 MINUTES)

5. Variable costing net operating loss ... $ (10,000)

Add: Fixed manufacturing overhead cost deferred

in inventory under absorption costing

(2,000 units × $30 per unit)... 60,000

Absorption costing net operating income... $ 50,000

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Solutions Manual, Chapter 7 371

Problem 7-14 (45 minutes)