1. Sierra Company incurs the following costs to produce and sell a single product. Variable costs per unit: Direct materials $9 Direct labor $10 Variable manufacturing overhead $5 Variable selling and administrative expenses $3 Fixed costs per year: Fixed manufacturing overhead $150,000 Fixed selling and administrative expenses $400,000 ________________________________________ During the last year, 25,000 units were produced and 22,000 units were sold. The Finished Goods inventory account at the end of the year shows a balance of $72,000 for the 3,000 unsold units. Compute the total cost of finished goods inventory using variable costing? Compute the total cost of finished goods inventory using absorption costing? At what dollar amount should the 3,000 units be carried in the inventory for external reporting purposes? 2. Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below: Whitman Company Income Statement Sales (35,000 units