A company that produces a single product had a net operating income of $85,000 using variable costing and a net operating income of $115,000 using absorption costing. Total fixed manufacturing overhead was $56,100 and production was 11,000 units both this year and last year. Last year was the first year of operations. Between the beginning and the end of the year, the inventory level: (Do not round intermediate computation and round your final answer to nearest whole number.)
1. increased by 5,882 units
2. decreased by 30,000 units
3. decreased by 5,882 units
4. increased by 30,000 units
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