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Home / Questions / Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The co

Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The co


Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variabl costin Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variable costi Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variabl costing for internal management reports and absorption costing for external reports to shareholders, creditors, and the government. The company has provided the following data: Year 1 Year 2 Year 3 Inventories Beginning (units) Ending (units) Variable costing 210 170 190 170 190 240 net operating income $300,000 $279,000 $250,e00 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Required: 1. Calculate each year's absorption costing net operating income. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Year 3 Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income 300,000 S 279,000 $ 250,000 wwwwww r Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports to shareholders, creditors, and the government. The company has provided the following data: Year 1 Year 2 Year 3 Inventories Beginning (units) Ending (units) Variable costing net operating income 210 170 19e 170 190 240 $300,e00 $279,000 $250,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. 2. Assume in Year 4 that the company's variable costing net operating income was $260,000 and its absorption costing net operating income was $290,000 Did inventories increase or decrease during Year 4? a. Increase Decrease b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?

 

Apr 01 2020 View more View Less

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