Use the following Information to answer questions 42-44 [The following Information applies to the questions displayed below.] Huron Chalk Company manufactures sidewalk chalk which it sells online by the box at $22 per unit. Huron uses an actual costing system, which means that the actual costs of direct material, direct labor, and manufacturing overhead are entered into work-in- process Inventory. The actual application rate for manufacturing overhead is computed each year, actual manufacturing overhead is divided by actual production (in units) to compute the application rate. Information for Huron's first two years of operations is as follows: Sales (In units) Production (in units) Production costs: costs Year 1 Year 2 3,100 3,100 3,600 2,600 Variable manufacturing $15,840 $ 11,440 19,440 19,440 overhead Selling and administrative expenses: Variable 12,400 12,400 Fixed 11,400 11,400 Fixed manufacturing Selected Information from Huron's year-end balance sheets for its first two years of operation is as follows: HURON CHALK COMPANY Selected Balance Sheet Information Based on absorption costing Retained earnings" Finished-goods Inventory Based on variable costing End of Year 1 End of Year 2 $4,900 8.520 $ 14,440 End of Year 1 End of Year 2 Finished-goods Inventory Retained earnings* $2,200 5,820 $ 14,440 *For convenience, assume that dividends for Year 1 is $5,500 and Year 2 Is $2,700. No taxes or other expenses were incurred for both the years.