Innerspace Incorporated produces drones. 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 3 Inventories Beginning (units) Ending units) Variable costing met operating income 210 150 $300,000 Year 2 150 180 $269,000 180 230 $250,000 The company's fixed manufacturing overhead per unit was constant at $500 for all three years. 2. Assume in Year 4 that the company's variable costing net operating Income was $250,000 and its absorption costing net operatin Income was $300,000. a. Did inventories increase or decrease during Year 4? Increase O Decrease b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4? Fixed manufacturing overhead cost Inventory during Your 4