Momentum Bikes Company manufactures a basic road bicycle. Production and sales data for the most recent year are as follows (no beginning inventory):

Variable production costs $90 per bike

Fixed production costs $500,000

Variable selling and administrative costs $22 per bike

Fixed selling and administrative costs $520,000

Selling price $200 per bike

Production 20,000 bikes

Sales 18,000 bikes

Instructions

Prepare a brief income statement using absorption costing and variable costing.

Compute the amount to be reported for inventory in the year-end absorption costing and variable costing balance sheet.