Sheridan Company produced $10,000$ units during the past year but sold only $8,000$ of the units. The following additional information is

also available:

There was no work in process inventory at the beginning of the year. Sheridan did not have any beginning finished goods inventory

either.

$($a$)$

Your answer is correct.

Calculate Sheridan Company's finished goods imventory cost on December $31$ under variable costing. $($Round per unit calculations

to $2$ decimal places, eg$.15\mathrm{.}25$ and final answer to $0$ decimal places, e$.$g$.125.)$

Finished goods inventory cost

$

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$($b$)$

Determine which costing method, absorption or variable, would show a higher net income for the year.

would show a higher net income.

By what amount? $($Round per unit calculations to $2$ decimal places, e$.$g$.15\mathrm{.}25$ and final answer to $0$ decimal places, e$.$g$.125.)$

Net income will be higher by $