Inventories: Beginning (units) Ending (units) Variable costing net operating income 200 170 170 180 $ 1,080,400 $ 1,032,400 The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Inventories: Beginning (units) Ending (units) Variable costing net operating income 200 170 170 180 $ 1,080,400 $ 1,032,400 The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter12: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 12.16E: Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...
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Jorgansen Lighting, Incorporated, manufactures heavy-duty street
lighting systems for municipalities. The company uses variable
costing for internal management reports and absorption costing for
external reports. The company provided the following data:
Year 1
Year 2
Inventories:
Beginning (units)
200
170
Ending (units)
170
180
Variable costing net operating income
$ 1,080,400
The company's fixed manufacturing overhead per unit was constant
at $560 for all three years.
$ 1,032,400
Required:
1. Calculate each year's absorption costing net operating income.
Note: Enter any losses or deductions as a negative value.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
Variable costing net operating income
Add (deduct) fixed manufacturing overhead deferred
in (released from) inventory under absorption costing
Absorption costing net operating income
Year 1
Year 2
Year 3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7dba75cf-2b52-469f-b4f8-06f23d2223af%2F53c391a1-8871-4e4b-bcd6-02b1047bc035%2Ft18u86g_processed.png&w=3840&q=75)
Transcribed Image Text:!
10
Required information
[The following information applies to the questions displayed below.]
Jorgansen Lighting, Incorporated, manufactures heavy-duty street
lighting systems for municipalities. The company uses variable
costing for internal management reports and absorption costing for
external reports. The company provided the following data:
Year 1
Year 2
Inventories:
Beginning (units)
200
170
Ending (units)
170
180
Variable costing net operating income
$ 1,080,400
The company's fixed manufacturing overhead per unit was constant
at $560 for all three years.
$ 1,032,400
Required:
1. Calculate each year's absorption costing net operating income.
Note: Enter any losses or deductions as a negative value.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
Variable costing net operating income
Add (deduct) fixed manufacturing overhead deferred
in (released from) inventory under absorption costing
Absorption costing net operating income
Year 1
Year 2
Year 3
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