Required Information Exercise 6-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO6-3] [The following information applies to the questions displayed below.] 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) 214 153 197 Ending (units) 153 197 239 Variable costing net operating $251,600 Income $291,900 $277,200 The company's fixed manufacturing overhead per unit was constant at $562 for all three years. Exercise 6-3 Part 1 Required: 1. Determine each year's absorption costing net operating Income. 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