1 Sparn Limited incurs the following costs to produce and sell a single product: 10 points Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses Fixed costs per year: Fixed manufacturing overhead Fixed selling administrative expenses 40 10 2 7 Skipped 373, 100 550,400 eBook During the last year, 53,300 units were produced and 34,400 units were sold. The Finished Goods Inventory account at the end of the year shows a balance of $327,600 for the 6,300 unsold units. Print Required: 1-a. Is the company using absorption costing or variable costing to cost units in the Finished Goods Inventory account? References Absorption costing Variable costing 1 1-b. Show computations to support your answer. Variable Costing Absorption Costing 10 points Skipped Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Unit product cost Total cost, 6,300 units S 0 $ 0 eBook Print References 2. Assume that the company wishes to prepare financial statements for the year to issue to its shareholders. a. Is the $327,600 figure for finished goods inventory the correct amount to use on these statements for external reporting purposes? Yes No b. At what dollar amount should the 6,300 units be carried in inventory for external reporting purposes? Inventory value for external reporting purposes