Jorgansen Lighting. Incorporated, manufactures heavy-duty street lighting systems for municipalities. The company usesvariable costing for Internal management reports and absorption costing for external reports. The company provided thefollowing data:Inventories:Beginning (units)Ending (units)Variable costing net operating incomeYear 1Year 2Year 3200178180170180220$ 1,080,400$ 1,032,400$ 996,400The company's fixed manufacturing overhead per unit was constant at $560 for all three years.Exercise 7-3 (Static) Part 1Required: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 IncomesVariable costing net operating incomeAdd (deduct) fixed manufacturing overhead deferredin (released from) inventory under absorption costingAbsorption costing net operating incomeYear 1Year 2Year 3

Step 1: We need to calculate the absorption costing net operating income for Jorgensen Lighting,…

Answered: Jorgansen Lighting. Incorporated,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Venice Textiles produces cloth. The inputs are fabric, labor, and overhead. Fragmentary productivity records from plant files for the last period show the following: Fabric price (per bolt) Sales price (per bolt) Sales revenue Manufacturing overhead Total factor productivity Total labor costs. $30.00 $ 120.00 0.38 $ 2,160,000 $ 510,000 1.60 $ 120,000 Required: Determine the partial fabric (materials) productivity. Partial fabric productivity
Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. A. Wood used to produce desks ($125.00 per desk) B. Production labor used to produce desks ($15 per hour) C. Production supervisor salary ($45,000 per year) D. Depreciation on factory equipment ($60,000 per year) E. Selling and administrative expenses ($45,000 per year) F. Rent on corporate office ($44,000 per year) G. Nails, glue, and other materials required to produce desks (varies per desk) H. Utilities expenses for production facility I. Sales staff commission (5% of gross sales)
Multiple Choice $685 per order $675 per order $544 per order $665 per order
[The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct material: 4 pounds at $9.00 per pound $ 36.00 Direct labor: 3 hours at $12 per hour 36.00 Variable overhead: 3 hours at $8 per hour 24.00 Total standard variable cost per unit $ 96.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost per Unit Sold Advertising $ 230,000 Sales salaries and commissions $ 160,000 $ 15.00 Shipping expenses $ 6.00 The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 33,000 units and incurred the following costs: Purchased 165,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was…
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Edney Company employs a standard cost system for product costing. The per-unit standard cost of its product is: Raw materials Direct labor (2 direct labor hours x $8.00 per hour) Manufacturing overhead (2 direct labor hours x $12.20 per hour) $ 14.00 16.00 24.40 $ 54.40 Total standard cost per unit The manufacturing overhead rate is based on a normal capacity level of 600,000 direct labor hours. The firm has the following annual manufacturing overhead budget: Variable Fixed $ 3,960,000 3,360,000 $ 7,320,000 Edney incurred $434,550 in direct labor cost for 54,100 direct labor hours to manufacture 26,000 units in November. Other costs incurred in November include $296,000 for fixed manufacturing overhead and $342,000 for variable manufacturing overhead. Required: 1. Determine each of the following for November. [Note: Indicate whether each variance is favorable (F) or unfavorable (U).] a. The variable overhead rate (spending) variance. b. The variable overhead efficiency variance. c. The…
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 Year 3 Inventories Beginning (units) 210 150 190 Ending (units) 150 190 230 Variable costing net operating income $ 290,000 $ 269,000 $ 260,000 The company's fixed manufacturing overhead per unit was constant at $550 for all three years. 2. Assume in Year 4 the company's variable costing net operating income was $250,000 and its absorption costing net operating income was $300,000. Did inventories increase or decrease during Year 4? How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4 ?
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