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Denton Company manufactures and sells a single product. Cost data for the product are given below:
Variable costs per unit:
€œI€™m confused,€ said the president. €œThe accounting people say that our break-even point is 16,000 units per month, but we sold only 15,000 units in July and the income statement they prepared shows a $ 10,000 profit for that month. Either the income statement is wrong or the break-even point is wrong.€ Prepare a brief memo for the president, explaining what happened on the July absorption costing incomestatement.
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