Year 1 Sales (in units) Production (in units) 3,100 Year 2 3,100 3.600 2,600 Production costs: Variable manufacturing $15.840 $11,440 costs Fixed manufacturing 19.440 19.440 overhead Selling and administrative expense Variable Fixed 12,400 12,400 11,400 11,400 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 Finished-goods inventory Retained earnings* Based on variable costing Finished-goods inventory Retained earnings* End of Year 1 End of Year 2 $4,900 8.520 $ 0 14.440 End of Year 1 End of Year 2 $2,200 5,820 $ 0 14.440