$27.$ Fairfax Inc. manufactures a small part that is widely used in various electronic products. Operating results for the first three years of operation are as follows:

Year $1$ year $2$ Year $3$

Sales $800,000640,000800,000$

CGS$.600,000420,000$

Gross margin $200,000220,000$

Selling and aamid. $200,000180,000$

$040,000$

Production and sales data for the three$-$year period were as follows:

Yr $1$ yr $2$ yr$3$

Production units $50,00060,00045,000$

Sales units: $50,00040,00050,000$

Additional information:

$1.$The company plant is highly automated. Variable manufacturing costs total $$3$ per unit. Annual fixed manufacturing overhead is $$450,000.$

$2.$Variable and selling and administrative expenses were$$2$ per unit sold. Annual fixed selling and administrative expenses totaled $100,000$ annually

$3.$The above costs stayed constant across the three years and the company uses a FIFO inventory flow assumption.

Required:

$1.$Complete the traditional income statement above for year $3$

$2.$ Complete the following NOI Reconcile table $($show full details of how you calculated the deferred and released amounts for any credit$)$

YEAR $1$ YEAR $2$

Reconciliation report

Variable costing NOI

FO deferred in Inventory

FO released from inventory

Absorption costing NOI

$-16,000$