Answer:
Results are below.
Explanation:
<u>The absorption costing </u>method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
<u>The variable costing method</u> incorporates all variable production costs (direct material, direct labor, and variable overhead).
<u>First, we will calculate the unitary and ending inventory cost under variable costing:</u>
Unitary production cost= 30 + 18 + 14= $62
Ending inventory= 21,500*62= $1,333,000
<u>Now, under the absorption costing:</u>
Unitary production cost= 62 + 22= $84
Ending inventory= 21,500*84= $1,806,000