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9-23 Comparison of actual-costing method. The Rehe Company sells its razors at $3 per unit. The company uses a first-in, first-out actual costing system. A fixed manufacturing cost rate is computed at the end of each year by dividing the actual fixed manufacturing costs by the actual production units. The following data are related to the first two years of operation: 2011 2012 Sales 1,000 units 1,200 units Production 1,400 units 1,000 units Costs: Variable manufacturing $700 $500 Fixed manufacturing 700 700 Variable operating (marketing) 1,000 1,200 Fixed operating (Marketing) 400 400 Question #2: Prepare income statements based on absorption costing for each of the two years.

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