5. Direct and absorption inventory costing Milsap Industries began business on January 1 of the current year, manufacturing and selling a single product. Consider the data that follow: Units Variable cost per unit Fixed costs Production volume 80,000 Sales volume 72,000 Direct materials $1.30 Direct labor 2.80 4.40 Factory overhead Selling expenses $540,000 0.20 180,000 a. Compute the cost of the company's ending inventory by using direct costing. b. Compute the cost of the company's ending inventory by using absorption costing. c. Suppose that Milsap's accountant had accidentally excluded straight-line depre- ciation on machinery from the data presented. Determine the effect of this error (overstate, understate, or no impact) on the company's 1) direct costing ending inventory. 2) absorption costing ending inventory. 6. Direct and absorntior