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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: Increase O Decrease Year 1 Inventories Beginning (units) 170 180 180 220 Ending (units) Variable costing net operating income $ 279,000 $ 260,000 The company's fixed manufacturing overhead per unit was constant at $570 for all three years. Fixed manufacturing overhead cost 200 170 $ 290,000 2. Assume in Year 4 that the company's variable costing net operating income was $240,000 and its absorption costing net operating income was $280,000. a. Did inventories increase or decrease during Year 4? deferred in Year 2 Year 3 b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4? inventory during Year 4

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: The company's fixed manufacturing overhead per unit was constant at $570 for all three years. 2. Assume in Year 4 that the company's variable costing net operating income was $240,000 and its absorption costing net operating income was $280,000. a. Did inventories increase or decrease during Year 4 ? Increase Decrease b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4

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