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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: Year 1 Year 2 Year 3 Inventories: Beginning (units) 200 170 180 Ending (units) 170 180 220 Variable costing net operating income $ 1,080, 400 $ 1,032, 400 $ 996, 400 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Required: 1. Calculate each year's absorption costing net operating income. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Year 3 Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Show Transcribed Text Required Information [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: Year 1 Year 2 Year 3 Inventories: Beginning (units) 200 170 180 Ending (units) 180 220 Variable costing net operating inco $ 1,080, 400 $ 1, 032,400 $ 996,400 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. 2. Assume In Year 4 that the company's variable costing net operating income was $984,400 and its absorption costing net operating income was $1,012,400. a. Did inventories increase or decrease during Year 47 Increase Decrease b, How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4? Answer is not complete. Fixed manufacturing overhead cost deferred in inventory during Your 4