In the previous year, a company’s total fixed manufacturing overhead costs were P13,600 and its total variable production costs were P15,000. There were no units in beginning inventory, 10,000 units were produced, and 9,200 units were sold. How much lower is the operating income for the previous year using direct (variable) costing versus absorption costing?

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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.