EXERCISE 6-3 Jog uses variable costing for internal management reports and absorption costing for exteiai compa to shareholders, creditors, and the government. The company has provided the following d 3 Reconciliation of Absorption and Variable Costing Net Operating Incomes [L06-3 ghting, Inc., manufactures heavy-duty street lighting systems for municipatie Year 1 Year 2 Year 3 Inventories: 200 170 170 180 180 Ending (units) . 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. Dmn each year's aborption costing net operating income. Present your answer in the 2. In Year 4, the company's variable costing net operating income was $984,400 and its absorp- Required: of a reconciliation report tion costing net operating income was $1,012,400. Did inventories increase or decrease dur- ing Year 4? How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4