Required information Exercise 4-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO4-3] [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 to shareholders, creditors, and the government. The company has provided the following data: Inventories Beginning (units) Ending (units) Variable costing net operating income Year 1 Year 2 Year 3 210 160 160 190 190 230 $ 290,000 $ 279,000 $ 260,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Exercise 4-3 (Algo) Part 1 Required: 1. Calculate each year's absorption costing net operating income. Note: Enter any losses or deductions as a negative value. Answer is complete but not entirely correct. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Year 1 $ 290,000 Year 2 Year 3 $279,000 $260,000 (201,600) (196,000) (235,200) > $ 88,400 $ 83,000 ☑$ 24,800 ×
Required information Exercise 4-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO4-3] [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 to shareholders, creditors, and the government. The company has provided the following data: Inventories Beginning (units) Ending (units) Variable costing net operating income Year 1 Year 2 Year 3 210 160 160 190 190 230 $ 290,000 $ 279,000 $ 260,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Exercise 4-3 (Algo) Part 1 Required: 1. Calculate each year's absorption costing net operating income. Note: Enter any losses or deductions as a negative value. Answer is complete but not entirely correct. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Year 1 $ 290,000 Year 2 Year 3 $279,000 $260,000 (201,600) (196,000) (235,200) > $ 88,400 $ 83,000 ☑$ 24,800 ×
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
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Problem 21E: Bounce Back Insurance Company carries three major lines of insurance: auto, workers compensation,...
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![Required information
Exercise 4-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO4-3]
[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 to shareholders, creditors,
and the government. The company has provided the following data:
Inventories
Beginning (units)
Ending (units)
Variable costing net operating income
Year 1
Year 2
Year 3
210
160
160
190
190
230
$ 290,000
$ 279,000
$ 260,000
The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Exercise 4-3 (Algo) Part 1
Required:
1. Calculate each year's absorption costing net operating income.
Note: Enter any losses or deductions as a negative value.
Answer is complete but not entirely correct.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
Variable costing net operating income
Add (deduct) fixed manufacturing overhead
deferred in (released from) inventory under
absorption costing
Absorption costing net operating income
Year 1
$ 290,000
Year 2
Year 3
$279,000 $260,000
(201,600) (196,000) (235,200) >
$ 88,400 $ 83,000 ☑$ 24,800 ×](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F22bca866-738c-4a19-a621-9987fd5f7e85%2Fe59d431a-a5ff-4742-9efc-5063c30b54b6%2Ffnz3ssl_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
Exercise 4-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO4-3]
[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 to shareholders, creditors,
and the government. The company has provided the following data:
Inventories
Beginning (units)
Ending (units)
Variable costing net operating income
Year 1
Year 2
Year 3
210
160
160
190
190
230
$ 290,000
$ 279,000
$ 260,000
The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Exercise 4-3 (Algo) Part 1
Required:
1. Calculate each year's absorption costing net operating income.
Note: Enter any losses or deductions as a negative value.
Answer is complete but not entirely correct.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes
Variable costing net operating income
Add (deduct) fixed manufacturing overhead
deferred in (released from) inventory under
absorption costing
Absorption costing net operating income
Year 1
$ 290,000
Year 2
Year 3
$279,000 $260,000
(201,600) (196,000) (235,200) >
$ 88,400 $ 83,000 ☑$ 24,800 ×
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