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Fleet, Inc. manufactured 700 units of Product A, a new product, in 2001. Product A's variable and fixed manufacturing costs per unit were $6.00 and $2.00, respectively. The inventory of Product A on December 31, 2001 consisted of 100 units. There was no inventory of Product A on January 1, 2001.
Required:
What would be the change in the dollar amount of inventory on December 31, 2001 if the variable costing method was used instead of the absorbption costing method?
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