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)	216	159	184
Ending (units)	159	184	238
Variable costing net operating income	$293,400	$274,600	$254,000

The company's fixed manufacturing overhead per unit was constant at $570 for all three years.

Calculate each year's absorption costing net operating income.

Absorption costing is a cost accounting methodology where all of the costs of the manufacturing of the goods and services are considered. Absorption costing includes direct material, direct labor, and manufacturing overhead (both variable and fixed). Absorption costing is used in determining the value of the inventory as reported in the assets on the balance sheet.

Answer rating: 100% (QA)

Requirement 1 Determine each years absorption costing net operating income Present your answer in th... View the full answer