The following information is available for Keller Corporation's new product line: Selling Price per unit: $15 Variable Manufacturing costs per unit of production : $8 Total annual fixed manufacturing costs : $25,000 Variable administrative costs per unit of production : $3 Total annual fixed selling and administrative expenses : $15,000 There was no inventory at the beginning of the year. During the year 12,500 units were produced and 10,000 units were sold.

a) Determine the cost of ending inventory, assuming Keller uses variable costing. b) Determine the cost ending inventory, assuming Keller uses absorption costing.