Spencer Electronics produces a wireless home lighting device that allows consumers to turn on home lights from their cars and light a safe path into and through their homes. Information on the first three years of business is as follows: 

Required 

a. Calculate profit and the value of ending inventory for each year using full costing. 

b. Explain why profit fluctuates from year to year even though the number of units sold, the selling price, and the cost structure remain constant. 

c. Calculate profit and the value of ending inventory for each year using variable costing. 

d. Explain why, using variable costing, profit does not fluctuate from year to year.

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2020 2021 2022 Total Units sold 20,000 20,000 20,000 60,000 Units produced 20,000 25,000 15,000 60,000 Fixed production costs $750,000 $750,000 $750,000 Variable production costs per unit $ 150 $ 150 $ 150 Selling price per unit $ 250 $ 250 $ 250 Fixed selling and administrative expense $220,000 $220,000 $220,000