BUS 590 Week 3 Assignment Ashford
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BUS 590 Week 3 Assignment Ashford
EXERCISE 6-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO6-3]
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:
The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Required:
1. Determine each year's absorption costing net operating income. Present your answer in the form of a reconciliation report.
2. In Year 4, the company's variable costing net operating income was $984,400 and its absorption costing net operating income was $1,012,400. Did inventories increase or decrease during Year 4? How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
EXERCISE 6-7 Segmented Income Statement [LO6-4]
Shannon Company segments its income statement into its North and South Divisions. The company's overall sales, contribution margin ratio, and net operating income are $500,000, 46%, and $10,000, respectively. The North Division's contribution margin and contribution margin ratio are $150,000 and 50%, respectively. The South Division's segment margin is $30,000. The company has $90,000 of common fixed expenses that cannot be traced to either division.
Required:
Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales.
Exercise 7-14 Calculating and Interpreting Activity-Based Costing Data, pages 324-325...