Required information [The following information applies to the questions displayed below.] 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 1 220 Ending (units) 170 Variable costing net operating income $ 300,000 The company's fixed manufacturing overhead per unit was constant at $550 for all three years. Year 2 170 200 $ 279,000 Year 3 200 230 $ 260,000 Increase O Decrease Assume in Year 4 that the company's variable costing net operating income was $250,000 and its absorption costing net operating mcome was $290,000. 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?
Required information [The following information applies to the questions displayed below.] 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 1 220 Ending (units) 170 Variable costing net operating income $ 300,000 The company's fixed manufacturing overhead per unit was constant at $550 for all three years. Year 2 170 200 $ 279,000 Year 3 200 230 $ 260,000 Increase O Decrease Assume in Year 4 that the company's variable costing net operating income was $250,000 and its absorption costing net operating mcome was $290,000. 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?
Cornerstones of Cost Management (Cornerstones Series)
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Chapter14: Quality And Environmental Cost Management
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Problem 21E: At the end of 20x5, Bing Pharmaceuticals began to implement an environmental quality management...
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narubhai
![Required information
[The following information applies to the questions displayed below.]
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 2
O Increase
O Decrease
Year 1
170
220
170
200
$ 300,000 $ 279,000
Ending (units)
Variable costing net operating income
The company's fixed manufacturing overhead per unit was constant at $550 for all three years.
Year 3
200
230
$ 260,000
2. Assume in Year 4 that the company's variable costing net operating income was $250,000 and its absorption costing net operating
income was $290,000.
a. Did inventories increase or decrease during Year 4?
Fixed manufacturing overhead cost
b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
inventory during Year 4](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4db8e804-fa17-4dd2-9780-545430525726%2Ff2efb0fe-9703-4ee2-a4fb-b19e439b6c1b%2F02ponjp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
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 2
O Increase
O Decrease
Year 1
170
220
170
200
$ 300,000 $ 279,000
Ending (units)
Variable costing net operating income
The company's fixed manufacturing overhead per unit was constant at $550 for all three years.
Year 3
200
230
$ 260,000
2. Assume in Year 4 that the company's variable costing net operating income was $250,000 and its absorption costing net operating
income was $290,000.
a. Did inventories increase or decrease during Year 4?
Fixed manufacturing overhead cost
b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
inventory during Year 4
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