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 3 Inventories Beginning (units) Ending (units) 190 230 Variable costing net operating income $ 260,000 The company's fixed manufacturing overhead per unit was constant at $570 for all three years. Exercise 6-3 (Algo) Part 1 Year 1 200 170 $ 290,000 Required: 1. Calculate each year's absorption costing net operating income. Note: Enter any losses or deductions as a negative value. Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Year 2 170 190 $ 279,000 Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Year 3

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 3 Inventories Beginning (units) Ending (units) 190 230 Variable costing net operating income $ 260,000 The company's fixed manufacturing overhead per unit was constant at $570 for all three years. Exercise 6-3 (Algo) Part 1 Year 1 200 170 $ 290,000 Required: 1. Calculate each year's absorption costing net operating income. Note: Enter any losses or deductions as a negative value. Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Year 2 170 190 $ 279,000 Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Year 3

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 5PA: Allocating selling and administrative expenses using activity-based costing Arctic Air Inc....

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