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Sunrise Pools and Spas manufactures fibreglass forms for In-ground pools and swim spas for all-season use. 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 data for their swim spa business in years 1, 2, and 3 shown below. The company's fixed manufacturing overhead per unit was constant at $4,300 for all three years: Year 1 Year 2 Year 3 Inventories: Beginning (units) 180 220 160 Ending (units) Variable costing operating income 220 $294,200 160 $271,000 260 $253,600 Required: 1. Determine each year's absorption costing operating Income. Present your answer in the form of a reconciliation report Absorption Costing Operating Incomes Year 1 Year 2 Year 3 Variable costing operating income Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income $ 0 $ 0 $ 0 2-a. In year 4, the company's varlable costing operating Income was $258,200 and its absorption costing operating Income was $229,200. Did Inventories increase or decrease during year 4? O Increase O Decrease 2-b. How much fixed manufacturing overhead cost was deferred or released from Inventory during year 4? Fixed manufacturing overhead cost Yinventory during year 4 released from deferred in

Sunrise Pools and Spas manufactures fibreglass forms for In-ground pools and swim spas for all-season use. 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 data for their swim spa business in years 1, 2, and 3 shown below. The company's fixed manufacturing overhead per unit was constant at $4,300 for all three years: Year 1 Year 2 Year 3 Inventories: Beginning (units) 180 220 160 Ending (units) Variable costing operating income 220 $294,200 160 $271,000 260 $253,600 Required: 1. Determine each year's absorption costing operating Income. Present your answer in the form of a reconciliation report Absorption Costing Operating Incomes Year 1 Year 2 Year 3 Variable costing operating income Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income $ 0 $ 0 $ 0 2-a. In year 4, the company's varlable costing operating Income was $258,200 and its absorption costing operating Income was $229,200. Did Inventories increase or decrease during year 4? O Increase O Decrease 2-b. How much fixed manufacturing overhead cost was deferred or released from Inventory during year 4? Fixed manufacturing overhead cost Yinventory during year 4 released from deferred in

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 10E: SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that...
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Sunrise Pools and Spas manufactures fibreglass forms for In-ground pools and swim spas for all-season use. 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 data for their swim spa business in years 1, 2, and 3 shown below. The company's fixed manufacturing overhead per unit was constant at $4,300 for all three years: Year 1 Year 2 Year 3 Inventories: Beginning (units) 180 220 160 Ending (units) Variable costing operating income 220 $294,200 160 $271,000 260 $253,600 Required: 1. Determine each year's absorption costing operating Income. Present your answer in the form of a reconciliation report Absorption Costing Operating Incomes Year 1 Year 2 Year 3 Variable costing operating income Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income $ 0 $ 0 $ 0 2-a. In year 4, the company's varlable costing operating Income was $258,200 and its absorption costing operating Income was $229,200. Did Inventories increase or decrease during year 4? O Increase O Decrease 2-b. How much fixed manufacturing overhead cost was deferred or released from Inventory during year 4? Fixed manufacturing overhead cost Yinventory during year 4 released from deferred in
Transcribed Image Text:Sunrise Pools and Spas manufactures fibreglass forms for In-ground pools and swim spas for all-season use. 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 data for their swim spa business in years 1, 2, and 3 shown below. The company's fixed manufacturing overhead per unit was constant at $4,300 for all three years: Year 1 Year 2 Year 3 Inventories: Beginning (units) 180 220 160 Ending (units) Variable costing operating income 220 $294,200 160 $271,000 260 $253,600 Required: 1. Determine each year's absorption costing operating Income. Present your answer in the form of a reconciliation report Absorption Costing Operating Incomes Year 1 Year 2 Year 3 Variable costing operating income Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income $ 0 $ 0 $ 0 2-a. In year 4, the company's varlable costing operating Income was $258,200 and its absorption costing operating Income was $229,200. Did Inventories increase or decrease during year 4? O Increase O Decrease 2-b. How much fixed manufacturing overhead cost was deferred or released from Inventory during year 4? Fixed manufacturing overhead cost Yinventory during year 4 released from deferred in
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