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Jorgansen Lighting, Incorporated, 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: Inventories Year 1 O Increase Decrease Year 2 170 200 $ 269,000 Beginning (units) 200 170 Ending (unita) Variable costing net operating income $ 300,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Year 3 2. Assume in Year 4 that the company's variable costing net operating income was $240,000 and its absorption costing net operating income was $300,000. a. Did inventories increase or decrease during Year 47 inventory during Year 4 200 230 $ 250,000 b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4? Fixed manufacturing overhead cost

Jorgansen Lighting, Incorporated, 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: Inventories Year 1 O Increase Decrease Year 2 170 200 $ 269,000 Beginning (units) 200 170 Ending (unita) Variable costing net operating income $ 300,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Year 3 2. Assume in Year 4 that the company's variable costing net operating income was $240,000 and its absorption costing net operating income was $300,000. a. Did inventories increase or decrease during Year 47 inventory during Year 4 200 230 $ 250,000 b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4? Fixed manufacturing overhead cost

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
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 29P: Jellison Company had the following operating data for its first two years of operations: Jellison...
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Jorgansen Lighting, Incorporated, 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: Inventories Beginning (units) Year 1 Increase O Decrease Year 2 200 170 Ending (units) Variable costing net operating income $ 300,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Fixed manufacturing overhead cost 170 200 $ 269,000 Year 3. 2. Assume in Year 4 that the company's variable costing net operating income was $240,000 and its absorption costing net operating income was $300,000. a. Did inventories increase or decrease during Year 4? inventory during Year 4 200 230 $ 250,000 b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
Transcribed Image Text:Jorgansen Lighting, Incorporated, 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: Inventories Beginning (units) Year 1 Increase O Decrease Year 2 200 170 Ending (units) Variable costing net operating income $ 300,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Fixed manufacturing overhead cost 170 200 $ 269,000 Year 3. 2. Assume in Year 4 that the company's variable costing net operating income was $240,000 and its absorption costing net operating income was $300,000. a. Did inventories increase or decrease during Year 4? inventory during Year 4 200 230 $ 250,000 b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
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