Required Information Exercise 6-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO6-3] [The following information applies to the questions displayed below.) 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) Ending (units) Variable costing net operating Income 214 153 153 197 197 239 $251,600 $291,900 $277,200 The company's fixed manufacturing overhead per unit was constant at $562 for all three years. Exercise 6-3 Part 2 2. In Year 4, the company's variable costing net operating Income was $256,800 and its absorption costing net operating Income was $270,200. a. Did Inventories Increase or decrease during Year 4? O Decrease O Increase b. How much fixed manufacturing overhead cost was deferred in or released from Inventory during Year 4? Fixed manufacturing overhead cost inventory during Year 4