Requlred Information
Exercise Static Reconciliation of Absorption and Varlable Costing Net Operating Incomes LO
The following information applies to the questions displayed below.
Jorgansen Lighting, Incorporated, manufactures heavyduty 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
Ending units
Variable costing net operating income
Year
$
Year
$
Year
$
The company's fixed manufacturing overhead per unit was constant at $ for all three years.
Exercise Static Part
Assume in Year that the company's variable costing net operating income was $ and its absorption costing net operating income was $
a Did inventories increase or decrease during Year
Increase
Decrease
b How much fixed manufacturing overhead cost was deferred or released from Inventory during Year
Fixed manufacturing overhead cost
inventory during Year
