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: Inventories Beginning (units) Ending (units) Variable costing net operating income Year 1 Year 2 Year 3 220 160 $300,000 160 200 200 $279,000 240 $250,000 The company's fixed manufacturing overhead per unit was constant at $500 for all three years. Required: 1. Calculate each year's absorption costing net operating income. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income Year 1 Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Year 2 Year 3 Absorption costing net operating income