Compute the cost of ending finished goods inventory reported on the balance sheet using variable costing and absorption costing.

P2 Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. Each racket was sold at a price of $90. Fixed overhead costs are $78,000 per year, and fixed selling and administrative costs are $65,200 per year. The company also reports the following per unit variable costs for the year. Prepare an income statement under variable costing. Direct materials. . .... $12 Direct labor . . . . . . 8 Variable overhead 5 NU Variable selling and administrative expenses