Ortiz Company produced 9,000 units during the past year but sold only 8,200 of the units. The following additional information is also available:

There was no work in process inventory at the beginning of the year. Ortiz did not have any beginning finished goods inventory either.
Instructions
(a) Calculate Ortiz Company's finished goods inventory cost on December 31 under variable costing.
(b) Determine which costing method, absorption or variable, would show a higher net income for the year. By what amount?

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Direct materials used Direct labour incurred Variable manufacturing overhead Fixed manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses $79,000 30,000 21,500 45,000 70,000 10,000