Chapter 6 - Homework Part 2 of 2 Required information Exercise 6-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes (L06-3) The following information applies to the questions displayed below.) 0.57 points 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: ebook Year 1 Year 2 Year 3 Inventories Beginning (units) Ending (units) Variable costing net operating income 220 150 $290,000 190 $279.000 190 240 $260,000 References The company's fixed manufacturing overhead per unit was constant at $500 for all three years. Exercise 6-3 Part 2 2. Assume in Year 4 that the company's variable costing net operating income was $250.000 and its absorption costing net operating income was $310,000 a. Did Inventories increase or decrease during Year 4? Increase Variable costing net operating income $290,000 $279, eee $260,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Exercise 6-3 Part 2 2. Assume in Year 4 that the company's variable costing net operating income was $250,000 and its absorption costing net operating income was $310,000. a. Did inventories increase or decrease during Year 4? nces Increase Decrease b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4? Fixed manufacturing overhead cost inventory during Year 4 ere to search