Sierra Company incurs the following costs to produce and sell its only product.

Variable costs per unit:

Direct materials $ $9$

Direct labor $ $8$

Variable manufacturing overhead $ $4$

Variable selling and administrative expenses $ $5$

Fixed costs per year:

Fixed manufacturing overhead $ $87,750$

Fixed selling and administrative expenses $ $295,000$

During this year, $29,250$ units were produced and $24,750$ units were sold. The Finished Goods inventory account at the end of this year shows a balance of $$94,500$ for the $4,500$ unsold units.

Required:

$1-$a$.$ Calculate this year's ending balance in Finished Goods inventory two ways$$using variable costing and using absorption costing.

$1-$b$.$ Does it appear that the company is using variable costing or absorption costing to assign costs to the $4,500$ units in its Finished Goods inventory?

$2.$ Assume that the company wishes to prepare this year's financial statements for its stockholders.

a$.$ Is Finished Goods inventory of $$94,500$ the correct amount to include on the balance sheet for external reporting purposes?

b$.$ What balance should be reported in the Finished Goods inventory account for external reporting purposes?