During its first year of operations, Sand Dab Corporation produced 55,000 jars of hand cream based on a formula containing 10% glycolic acid. Unit sales were 53,500 jars. Actual fixed manufacturing overhead totaled $27,500 and was applied at the rate of $0.50 per unit produced. The results of the year's operations are as attached, based upon full absorption costing. At the end of its first year of operations, Sand Dab is considering expanding its customer base. In its first year, it sold to small drugstores and supermarkets. Now, Sand Dab wants to add large discount stores and small beauty shops in addition to its current customers. Working together, the company controller and marketing manager have accumulated the attached information. REQUIRED: (1) Calculate the cost of the company's ending inventory at the end of the first year using full absorption costing. Show supporting calculations. (2) Calculate the cost of the company's ending inventory at the end of the first year using variable costing. Show supporting calculations. (3) Using the attached form, prepare an income statement, in contribution margin format, for next year using variable costing. Show appropriate supporting calculations for the amounts that appear on the statement. SAND DAB CORPORATION RESULTS OF CURRENT YEAR'S OPERATIONS SAND DAB CORPORATION ADDITIONAL INFORMATION RELATING TO EXPANSION OF OPERATIONS (a) Anticipated sales to discount stores would be 20,000 units at a discounted price of $6.75. Higher costs of shipping and return penalties would be incurred. Shipping would amount to $45,000 per year, and return penalties would average 1% of sales. In addition, a clerk would need to be hired solely to handle the discount stores' accounts. The clerk's salary and benefits would be $30,000 per year. (b) Anticipated sales to beauty shops would be 10,000 units at a price of $9. A commission of 10% of sales would be paid to independent jobbers who sell to the shops. In addition, an extra packing expense of $0.50 per unit would be incurred because the shops require fewer bottles per carton. (c) The fixed manufacturing overhead, selling, and administrative expenses would remain unchanged