Required informationExercise 7-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes (LO7-3][The following information applies to the questions displayed below.]Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variablecosting for internal management reports and absorption costing for external reports to shareholders, creditors, and thegovernment. The company has provided the following data:Year 1Year 2Year 3InventoriesBeginning (units)Ending (units)Variable costing net operating income200160200210160230$290,000$269,000$250,000The company's fixed manufacturing overhead per unit was constant at $500 for all three years. Exercise 7-3 Part 1Required:1. Calculate each year's absorption costing net operating income. (Enter any losses or deductions as a rkagative value.)Reconciliation of Variable Costing and Absorption Costing Net Operating IncomesYear 1Year 2Year 3Variable costing net operating incomeAdd (deduct) fixed manufacturing overhead deferredin (released from) inventory under absorption costingAbsorption costing net operating income

Net operating income under absorption costing = Net operating income under variable costing +…

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 200 230 $250,000 160 200 210 160 $290,000 $269,000 The company's fixed manufacturing overhead per unit was constant at $500 for all three years.

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 200 230 $250,000 160 200 210 160 $290,000 $269,000 The company's fixed manufacturing overhead per unit was constant at $500 for all three years.

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter19: Cost-Volume-Profit Analysis

Section: Chapter Questions

Problem 8DQ: Both Austin Company and Hill Company had the same unit sales, total costs, and income from...

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Both Austin Company and Hill Company had the same unit sales, total costs, and income from operations for the current fiscal year; yet, Austin Company had a lower break-even point than Hill Company. Explain the reason for this difference in break-even points.
T3-6 Variable versus absorption costing (LO 1, 2) Regal Printing, Inc., prints and binds encyclopedias. The following information was found in the accounting records: Sales price per unit $ 103 Direct materials per unit $ 50 Direct labor per unit $ 16 Variable overhead per unit $ 10 Fixed overhead per unit $ 23 Fixed selling costs $ 55,000 Variable selling costs $180,000 Beginning inventory 0 Units produced 100,000 Units sold 90,000 Questions a.Under absorption costing, what is Regal's operating income? b.Under variable costing, what is Regal's ending Finished Goods Inventory balance?
T3-7 Variable costing versus absorption costing (LO 1, 2) The following data were prepared by the Waco Wagon Company. Total Variable Fixed Sales price $20/unit Direct materials used $ 90,000 Direct labor $ 99,000 Manufacturing overhead $ 90,000 $ 9,000 $81,000 Selling and administrative expense $ 23,000 $14,000 $ 9,000 Units manufactured 18,000 units Beginning Finished Goods Inventory 20,000 units Ending Finished Goods Inventory 24,000 units Required a.Under absorption costing, what is the unit product cost? b.Under variable costing, what is the unit product cost? c.Under absorption costing, what is the cost of goods sold? d.Under variable costing, what is the cost of goods sold? e.Under absorption costing, what is the operating income? f.Under variable costing, what is the operating income? g.Reconcile the difference in operating income under absorption costing versus variable costing.
ch7q39 Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income Werner Company produces and sells disposable foil baking pans to retailers for $2.95 per pan. The variable cost per pan is as follows: Direct materials $0.22 Direct labor 0.56 Variable factory overhead 0.70 Variable selling expense 0.13 Fixed manufacturing cost totals $303,290 per year. Administrative cost (all fixed) totals $41,358. Required: 1. Compute the number of pans that must be sold for Werner to break even. pans 2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the nearest cent. Unit variable cost $ Unit variable manufacturing cost $ Which is used in cost-volume-profit analysis?Unit variable cost 3. How many pans must be sold for Werner to earn operating income of $11,524? pans 4. How much sales revenue must Werner have to earn operating income 11524$
7. Which one of these is not an objective of cost accounting? a.Assisting shareholders in decision making b.Cost control and reduction c.Ascertainment of cost d.Determination of selling price 8. Calculate EOQ from the following details: Consumption per month is 2,000 units, ordering cost is RO 10 per order, purchase price is RO 100 per unit and annual carrying cost is 6%. a.283 units b.245 units c.219 units d.310 units
ch7-q39 I have asked this question yesterday and this is a follow up on it : why did you use unit variable manufacturing cost as total variable cost minus? Also, you didn't answer the question : Which is used in cost-volume-profit analysis? variable selling expence and not also variable factory overhead? Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income Werner Company produces and sells disposable foil baking pans to retailers for $2.95 per pan. The variable cost per pan is as follows: Direct materials $0.22 Direct labor 0.56 Variable factory overhead 0.70 Variable selling expense 0.13 Fixed manufacturing cost totals $303,290 per year. Administrative cost (all fixed) totals $41,358. Required: 1. Compute the number of pans that must be sold for Werner to break even. pans 2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the nearest cent. Unit…
P7-2A Variable and Absorption Costing---Service Company Jensen's Tailoring provides custom tailoring services. After the company's first year of operations, its owner prepared the following summarized data report for 2019: Sales (500 completed jobs) $ 100,000 Tailoring costs (550 jobs): Direct labor 47,000 Manufacturing overhead: Variable 12,000 Fixed 9,000 Operating expenses: Variable 5,600 Fixed 5,800 Required a. Prepare an income statement based on full absorption costing. (Round ending inventory to the nearest $.) b. Prepare an income statement based on variable costing. (Round ending inventory to the nearest $.) c. Assume that you must decide quickly whether to accept a special one-time order to alter 50 band costumes for $125 per costume. Which income statement presents the most…
P8-2A Special Order Total cost data follow for Glendale Manufacturing Company, which as a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseable future, regular sales volume should continue to equal normal capacity. Direct materials $ 100,800 Direct labor 62,400 Variable manufacturing overhead 46,800 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $ 298,600 Notes: 1. Beyond capacity, fixed overhead costs increase $1,800 for each 500 units or fraction thereof until a maximum capacity of 10,000 units is reached. 2. Selling expenses consist of a 6%…
Reconciliation of Absorption and Variable Costing Net Operating Incomes 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: 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. Present your answer in the form of a reconciliation report. 2. Assume in Year 4 that the company’s variable costing net operating income was $984,400 and its absorption costing net operating income was $1,012,400. 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?
E7-2A Variable and Absorption Costing--Service Company Lawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $140. The variable and fixed cost data are as follows: Direct labor $ 80 Overhead: Variable cost per unit $ 5 Fixed cost $ 100,000 Marketing, general, and administrative: Variable cost (per contract completed) $ 6 Administrative expense (fixed) (per month) $ 42,000 During 2019, 10,000 service contracts were signed and 9,800 service contracts were completed. Lawn RX had no service contracts at the beginning of the year.…
choose the best answer (mcqs) just choose the no need of any explanation: 1) The following information is available for Barnes Company for the fiscal year ended December 31: Beginning finished goods inventory in units 0 Units produced 4,800 Units sold 4,000 Sales $ 400,000 Materials cost $ 96,000 Variable conversion cost used $ 48,000 Fixed manufacturing cost $ 72,000 Indirect operating costs (fixed) $ 80,000 The variable costing operating income is: A $120,000 B $104,000 C $140,000 D $128,000 2) Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $ 252,000 Variable manufacturing overhead per machine-hour $ 2.10 Recently, Job T687 was completed with the…
Lewisville CorporationIn order to better match cost with revenues, Lewisville Corporation distributes its service department overhead costs to producing departments. Information for April is presented here. Maintenance Utilities Overhead costs incurred $18,700 $9,000 Service provided to: Maintenance Dept. 10% Utilities Dept. 20% Producing Dept. A 40% 30% Producing Dept. B 40% 60% Assume that Lewisville Corporation distributes service department overhead costs based on the algebraic method. What would be the formula to determine the total maintenance costs? Group of answer choices M = $18,700 + .10U M = $9,000 + .20U M = $18,700 + .30U + .40A + .40B M = $27,700 + .40A + .40B