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 to shareholders, creditors, and the government. The company has provided the following data: Inventories Exercise 7-3 (Algo) Part 1 Beginning (units) Ending (units) 210 170 170 190 Variable costing net operating income $ 300,000 $ 269,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Year 1 Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Answer is complete but not entirely correct. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 2 269,000 $ Year 1 $ 300,000 $ Required: 1. Calculate each year's absorption costing net operating income. (Enter any losses or deductions as a negative value.) A (117,430) X $ 417,430 $ Year 2 (95,010) X 364,010 $ Year 3 Year 3 250,000 (1,088,070) X 358,070 X 190 230 $ 250,000

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 to shareholders, creditors, and the government. The company has provided the following data: Inventories Exercise 7-3 (Algo) Part 1 Beginning (units) Ending (units) 210 170 170 190 Variable costing net operating income $ 300,000 $ 269,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Year 1 Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Answer is complete but not entirely correct. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 2 269,000 $ Year 1 $ 300,000 $ Required: 1. Calculate each year's absorption costing net operating income. (Enter any losses or deductions as a negative value.) A (117,430) X $ 417,430 $ Year 2 (95,010) X 364,010 $ Year 3 Year 3 250,000 (1,088,070) X 358,070 X 190 230 $ 250,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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