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Finance 8 Online
OpenStudy (anonymous):

Under the absorption costing method, a company can increase profits by increasing production rather than by increasing sales. TRUE or FALSE

OpenStudy (anonymous):

I think it is true because under the absorption costing method, inventory changes can affect the profit, keeping sales the same. For example, when inventory increase, some of the fixed costs are deferred in the inventory and won't be calculated in this period. Therefore increasing production can increase profit.

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