Question

The following information applies to the questo displayed below Jorgansen Lighting, Inc., manufactures heavy duty street lighting systems for municipalities. The company uses variable costing for internal management reports and shareholders, creditors, and the government. The company has provided the following det Year Inwentories: Beginning out Ending units Variable costing net operating income TRE 210 159 $291700 9 188 $273.300 $254.000 The company's fred manufacturing overhead per unit was consta $552 for all three years 3. 2.00 points Required: 1. Determine each year's absorption costing net operating income Reconciliation of Variable Coating and Absorption Costing Net Operating incomes Year 1 Year 2 Variable costing net operating income Add(deduct) fred maracturing overhead deferred in released from inventory under absorption costing Absorption costing net operating income $

Answer 1

1. Reconcile the variable costing and absorption costing Net income Year 1 Year-2 Year-3 291700 273300 254600 -22632 10488 23736 Variable Costing Net Operating Income Add (Deduct) Fixed Manufacturing Overheads cost Deferred in (released From) inventory Absorption Costing Net Operating Income 269068 283788 278336 Working Note - 1 Year 1 Beginning Inventory Ending Inventory Difference in units =( Ending - Beginning) Difference in manufacturing overheads = ( Difference in units * fixed manufacturing overheads per unit) = @552 Year-2 Year-3 210 169 188 169 188 231 -41 19 43 -22,632 10,488 23,736