Mathematics · Marginal and Absorption Costing

The following data is available on the production and sales for the first three years of a company's new product: Year 1Year 2Year 3Production units5,0006,0004,000Sales units4,0006,0005,000 Variable costs per unit, selling price, and total fixed costs per year were constant over the three-year period. The company is considering the use of either marginal or absorption costing. Which of the following statements is/are true? (1) Absorption costing will show a lower profit than marginal costing in Year 1. (2) Marginal costing will show a lower closing inventory valuation than absorption costing in Year 2. (3) Total profit over the three-year period will be the same under both methods.