Required information

Skip to question

$[$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. The company provided the following data:

Year $1$ Year $2$ Year $3$

Inventories

Beginning $($units$)200150180$

Ending $($units$)150180240$

Variable costing net operating income $ $300,000$ $ $279,000$ $ $260,000$

The company$$s fixed manufacturing overhead per unit was constant at $$550$ for all three years.

$2.$ Assume in Year $4$ the company$$s variable costing net operating income was $$260,000$ and its absorption costing net operating income was $$310,000.$

Did inventories increase or decrease during Year $4?$

How much fixed manufacturing overhead cost was deferred or released from inventory during Year $4?$