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Jorgansen Lighting, Incorporated, manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing...

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Accounting

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)210160190
Ending (units)160190230
Variable costing net operating income $ 300,000 $ 269,000 $ 260,000
The companys fixed manufacturing overhead per unit was constant at $560 for all three years.
2. Assume in Year 4 the companys variable costing net operating income was $250,000 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?

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