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EXERCISE 6-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO3] High Tension Transformers, Inc., manufactures heavy-duty transformers for electrical switching stations. The company
EXERCISE 6-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO3] High Tension Transformers, Inc., manufactures heavy-duty transformers for electrical switching stations. 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): 180 150 160 Ending (units): 150 160 200 Variable costing net operating income $292,400 $269,200 $251,800
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