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! Required information Exercise 4-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO4-3] [The following information applies to the questions displayed

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! Required information Exercise 4-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO4-3] [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) Ending (units) Variable costing net operating income Year 1 Year 2 Year 3 210 170 170 180 180 230 $ 300,000 $ 269,000 $ 260,000 The company's fixed manufacturing overhead per unit was constant at $570 for all three years. Exercise 4-3 (Algo) Part 1 Required: 1. Calculate each year's absorption costing net operating income. Note: Enter any losses or deductions as a negative value. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Variable costing net operating income $ 300,000 Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Year 3

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