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) 210 160 180 Ending (units) 160 180 220 Variable costing net operating income $300,000 $269,000 $250,000 The companys fixed manufacturing overhead per unit was constant at $400 for all three years.