Required information Exercise 7-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating In [The following information applies to the questions displayed below.] Jorgansen Lighting, Incorporated, manufactures heavy-duty street lighting systems for municipalities_ variable costing for internal management reports and absorption costing for external reports to share and the government. The company has provided the following data: Inventories Beginning (units) Year 1 Increase Decrease 210 Ending (units) 170 Variable costing net operating income $ 300,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Year 2 Fixed manufacturing overhead cost Year 3 170 190 $ 269,000 Exercise 7-3 (Algo) Part 2 2. Assume in Year 4 that the company's variable costing net operating income was $250,000 and its absorp income was $290,000. a. Did inventories increase or decrease during Year 4? inventory during Year 4 190 230 $ 250,000 b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
Required information Exercise 7-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating In [The following information applies to the questions displayed below.] Jorgansen Lighting, Incorporated, manufactures heavy-duty street lighting systems for municipalities_ variable costing for internal management reports and absorption costing for external reports to share and the government. The company has provided the following data: Inventories Beginning (units) Year 1 Increase Decrease 210 Ending (units) 170 Variable costing net operating income $ 300,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Year 2 Fixed manufacturing overhead cost Year 3 170 190 $ 269,000 Exercise 7-3 (Algo) Part 2 2. Assume in Year 4 that the company's variable costing net operating income was $250,000 and its absorp income was $290,000. a. Did inventories increase or decrease during Year 4? inventory during Year 4 190 230 $ 250,000 b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Requirea normation
Exercise 7-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO7-3]
[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
Year 1
Increase
O Decrease
Beginning (units)
210
170
Ending (units)
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 2
Fixed manufacturing overhead cost
Year 3
Exercise 7-3 (Algo) Part 2
2. Assume in Year 4 that the company's variable costing net operating income was $250,000 and its absorption costing net operating
income was $290,000.
a. Did inventories increase or decrease during Year 4?
inventory during Year 4.
190
230
$ 250,000
b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F369b8e36-96ad-449f-ad01-79081127dffb%2Fec617d6e-33ae-4501-ac81-c667cd31a0f1%2F01p7b2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Requirea normation
Exercise 7-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO7-3]
[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
Year 1
Increase
O Decrease
Beginning (units)
210
170
Ending (units)
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 2
Fixed manufacturing overhead cost
Year 3
Exercise 7-3 (Algo) Part 2
2. Assume in Year 4 that the company's variable costing net operating income was $250,000 and its absorption costing net operating
income was $290,000.
a. Did inventories increase or decrease during Year 4?
inventory during Year 4.
190
230
$ 250,000
b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
A
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