Question

Check im [The following information applies to the questions displayed below.) Jorgansen Lighting, Inc., 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 Year 2 Year 3 Inventories Beginning (units) Ending (units) Variable costing net operating income 210 160 $300,000 160 180 $279,000 180 240 $260,000 The company's fixed manufacturing overhead per unit was constant at $550 for all three years. Required: 1. Calculate each year's absorption costing net operating income. (Enter any losses or deductions as an value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Year 3 Variable costing net operating income

Answer 1

Answer

Α. 1 2 Variable Costing and Costing Net Operating Incomes 3 Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing 4 Absorption costing net operating income в с D Year 1 Year 2 Year 3 $ 300,000 $ 279,000 $260,000 $ (27,500) $ 11,000 $ 33,000 | $ 272,500 $ 290,000 $293,000 |

Calculations:

1 2 Variable Costing and Costing Net Operating Incomes 3 Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing 4 Absorption costing net operating income BC D Year 1 Year 2 Year 3 300000 279000 260000 =(160-210)*550 =(180-160)*550 =(240-180)*550 =SUM(B2:33) =SUM(C2:03) =SUM(D2:D3)

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