The following information pertains to Vladamir, Inc., for last year:

Beginning inventory, units.......................................................1,320

Units produced..................................................................100,000

Units sold........................................................................101,000

Variable costs per unit:

Direct materials.....................................................................$8.00

Direct labor...........................................................................$9.50

Variable overhead..................................................................$1.25

Variable selling expenses.........................................................$2.00

Fixed costs per year:

Fixed overhead.................................................................$234,000

Fixed selling and administrative expenses.................................$236,000

There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next.

Required:

1. How many units are in ending inventory?

2. Without preparing an income statement, indicate what the difference will be between variable- costing income and absorption-costing income.

3. Assume the selling price per unit is $29. Prepare an income statement using (a) variable costing and (b) absorption costing.