$[$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:

The company's fixed manufacturing overhead per unit was constant at $$570$ for all three years.

Exercise $6-3($Algo$)$ Part $2$

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

income was $$300,000.$

a$.$ Did inventories increase or decrease during Year $4?$

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

Complete this question by entering your answers in the tabs below.

Required $2a$

Did inventories increase or decrease during Year $4?2$

Variable costing net operating income $$290,000$ $$269,000$ $$260,000$

The company's fixed manufacturing overhead per unit was constant at $$570$ for all three years.

Part $2$ of $2$

Exercise $6-3($Algo$)$ Part $2$

$2\mathrm{.}5$

points

$2.$ Assume in Year $4$ the company's variable costing net operating income was $$260,000$ and its absorption costing net operating income was $$300,000.$

a$.$ Did inventories increase or decrease during Year $4?$

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

Complete this question by entering your answers in the tabs below.

Required $2a$

Required $2b$

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

Mc

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