Sharp Company manufactures a product for which the following data and information related to inventory is available. The company uses variable costing for internal management reports and absorption costing for external reports to the shareholders, creditors, and the government. The company has provided the following data:

	Year-1	Year-2	Year-3
Inventories:
Beginning (units)	200	160	180
Ending (units)	160	180	220
Variable Costing net operating income	$1,080,400	$1,032,400	$996,400

The companys fixed manufacturing overhead per unit was constant at $650 for all the three years.

Determine each years absorption costing net operating income. Present your answer in the form of a reconciliation report. (you must show all calculations). In year four, the companys variable costing net operating income was $984,400 and its absorption costing net operating income was $1,012,400. Did Inventories increase or decrease during year four? Why? How much fixed manufacturing overhead cost was deferred or released from inventory during year four? What is the ending inventory in units in the year 4? Show with calculation.