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Cannondale bikes

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Cannondale bikes manufactures a basic road bicycle. Production and sales data
for the most recent year are as follows(no beginning inventory):

Variable production costs $90 per bike
Fixed production costs $450,000
Variable selling & administrative costs $22 per bike
Fixed selling & administrative costs $500,000
Selling Price $200 per bike
Production 20,000 bikes
Sales 17,000 bikes

(a) Prepare a brief income statement using variable costing.
(b) Compute the amount to be reported for inventory in the year end variable
costing balance sheet.

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