Required information

Exercise $6-3($Algo$)$ Reconciliation of Absorption and Variable Costing Net Operating Incomes $[$L$06-3]$

$[$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. The company provided the

following data:

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

Exercise $6-3($Algo$)$ Part $2$

Assume in Year $4$ the company's variable costing net operating income was $$250,000$ and its absorption costing net operating

income was $$300,000.$

a$.$ Did inventories increase or decrease during Year $4?$

b$.$ How much fixed manufacturing overhead cost was deferred or released from inventory during Year $4?$