Required information Exercise 7-3 (Algo) Reconciliation of Absorption and Variable Costing Net Operating Incomes [LO7-3] [The following information applies to the questions displayed below.] Jorgansen Lighting, Incorporated, 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) 210 160 160 180 180 230 Variable costing net operating income $ 290,000 $ 279,000 $ 250,000 The company's fixed manufacturing overhead per unit was constant at $560 for all three years.