Cinnabar, Inc. has provided the following data for the year:

Direct materials

$10

per unit

Direct labor

$15

per unit

Variable manufacturing overhead

$20

per unit

Fixed manufacturing overhead

$25,000

per year

Fixed selling and administrative costs

$15,000

per year

Sales price

$75

per unit

Beginning Finished Goods Inventory

500

units

Units produced

5,000

units

Units sold

4,500

units

Requirements:

a) Compute Cinnabar's unit product cost under absorption costing and variable costing.

b) Prepare income statements for Cinnabar using absorption costing and variable costing.

c) Calculate the balance in Finished Goods Inventory using absorption costing and variable costing.

Assume that the production level, costs, and sales prices were the same in the previous year.