Required information Exercise 6-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO6-3] (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) 190 230 Variable costing net operating income $ 250,000 The company's fixed manufacturing overhead per unit was constant at $570 for all three years. 200 170 170 190 $ 200,000 $ 269,000 O Increase O Decrease Year 3 Exercise 6-3 (Algo) Part 2 2. Assume in Year 4 that the company's variable costing net operating income was $260,000 and its absorption costing net operating income was $290,000 a. Did inventories increase or decrease during Year 4? b How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4? Fleed manufacturing overhead cost vectory during Year A
Required information Exercise 6-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO6-3] (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) 190 230 Variable costing net operating income $ 250,000 The company's fixed manufacturing overhead per unit was constant at $570 for all three years. 200 170 170 190 $ 200,000 $ 269,000 O Increase O Decrease Year 3 Exercise 6-3 (Algo) Part 2 2. Assume in Year 4 that the company's variable costing net operating income was $260,000 and its absorption costing net operating income was $290,000 a. Did inventories increase or decrease during Year 4? b How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4? Fleed manufacturing overhead cost vectory during Year A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Dineshbhai
![Required information
Exercise 6-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO6-3]
(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
Year 1
Inventories
Beginning (units)
Ending (units)
190
230
Variable costing net operating income
$ 250,000
The company's fixed manufacturing overhead per unit was constant at $570 for all three years.
O Increase
O Decrease
200
170
$ 200,000
Year 3
170
190
$ 269,000
Exercise 6-3 (Algo) Part 2
2. Assume in Year 4 that the company's variable costing net operating income was $260,000 and its absorption costing net operating
income was $290,000
a. Did inventories increase or decrease during Year 4?
b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
Fleed manufacturing overhead cost
inventory during Year A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8b51d555-9423-48a2-8916-674f6ab4e3b9%2F036c74b1-4ba4-4cb1-a3ad-08e00f749693%2Fh4rtoxb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Exercise 6-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO6-3]
(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
Year 1
Inventories
Beginning (units)
Ending (units)
190
230
Variable costing net operating income
$ 250,000
The company's fixed manufacturing overhead per unit was constant at $570 for all three years.
O Increase
O Decrease
200
170
$ 200,000
Year 3
170
190
$ 269,000
Exercise 6-3 (Algo) Part 2
2. Assume in Year 4 that the company's variable costing net operating income was $260,000 and its absorption costing net operating
income was $290,000
a. Did inventories increase or decrease during Year 4?
b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
Fleed manufacturing overhead cost
inventory during Year A
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education