Question

Required information (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 3 220 190 Inventories Beginning (units) Ending (units) Variable costing net operating income 160 190 $300,000 $279.000 $250.680 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Required: 1. Calculate each year's absorption costing net operating Income. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Year 3 Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income

Answer 1

	Year 1	Year 2	Year 3
Variable costing net operating income	300,000	279,000	250,000
+(-) fmoh deferred(released) from end inv	--33,600	16,800	22,400
Absorption costing net operating income	266,400	295,800	272,400