Required information [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 2 200 160 $ 290,000 Inventories Beginning (units) Ending (units) Variable costing net operating income The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Year 3 160 180 $ 269,000 180 220 $ 250,000 2. Assume in Year 4 the company's variable costing net operating income was $240,000 and its absorption costing net operating income was $300,000. 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?
Required information [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 2 200 160 $ 290,000 Inventories Beginning (units) Ending (units) Variable costing net operating income The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Year 3 160 180 $ 269,000 180 220 $ 250,000 2. Assume in Year 4 the company's variable costing net operating income was $240,000 and its absorption costing net operating income was $300,000. 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?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...
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![Required information
[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
200
160
$ 290,000
Inventories
Beginning (units)
Ending (units)
Variable costing net operating income
The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Year 3
160
180
$ 269,000
180
220
$ 250,000
2. Assume in Year 4 the company's variable costing net operating income was $240,000 and its absorption costing net operating
income was $300,000.
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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F690b508d-6741-414c-89f1-77cc54191c17%2Fe24ec807-6f1f-4fd3-9d15-8a15743548a3%2Fjp00cn_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[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
200
160
$ 290,000
Inventories
Beginning (units)
Ending (units)
Variable costing net operating income
The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Year 3
160
180
$ 269,000
180
220
$ 250,000
2. Assume in Year 4 the company's variable costing net operating income was $240,000 and its absorption costing net operating
income was $300,000.
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?
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