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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

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) 220 160 200
Ending (units) 160 200 230
Variable costing net operating income $300,000 $269,000 $250,000

The companys fixed manufacturing overhead per unit was constant at $550 for all three years.

rev: 03_09_2019_QC_CS-162392

Exercise 6-3 (Algo) Part 1

Required:

1. Calculate each years absorption costing net operating income.

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