Inventories: Beginning (units). Ending (units)... Variable costing net operating income..... Year 1 180 150 $292,400 Year 2 Year 3 150 160 160 200 $269,200 $251,800 The company's fixed manufacturing overhead per unit was constant at $450 for all three years. Required: a. Determine each year's absorption costing net operating income. Present your answer in the form of a reconciliation report. b. In Year 4, the company's variable costing net operating income was $240,200 and its absorption costing net operating income was $267,200. Did inventories increase or decrease during Year 4? How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
Inventories: Beginning (units). Ending (units)... Variable costing net operating income..... Year 1 180 150 $292,400 Year 2 Year 3 150 160 160 200 $269,200 $251,800 The company's fixed manufacturing overhead per unit was constant at $450 for all three years. Required: a. Determine each year's absorption costing net operating income. Present your answer in the form of a reconciliation report. b. In Year 4, the company's variable costing net operating income was $240,200 and its absorption costing net operating income was $267,200. Did inventories increase or decrease during Year 4? How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter19: Variable Costing (varcost)
Section: Chapter Questions
Problem 4R: To determine the effect of different levels of production on the company’s income, move to cell B7...
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