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 200 230 $250,000 160 200 210 160 $290,000 $269,000 The company's fixed manufacturing overhead per unit was constant at $500 for all three years.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
100%
Required information
Exercise 7-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes (LO7-3]
[The following information applies to the questions displayed below.]
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
200
160
200
210
160
230
$290,000
$269,000
$250,000
The company's fixed manufacturing overhead per unit was constant at $500 for all three years.
Transcribed Image Text:Required information Exercise 7-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes (LO7-3] [The following information applies to the questions displayed below.] 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 200 160 200 210 160 230 $290,000 $269,000 $250,000 The company's fixed manufacturing overhead per unit was constant at $500 for all three years.
Exercise 7-3 Part 1
Required:
1. Calculate each year's absorption costing net operating income. (Enter any losses or deductions as a rkagative 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
Transcribed Image Text:Exercise 7-3 Part 1 Required: 1. Calculate each year's absorption costing net operating income. (Enter any losses or deductions as a rkagative 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
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Cost Sheet
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education