Inferring Costing Method; Unit Product Cost [LO3-CC138. 1431 Amcor, Inc. incurs the following costs to produce and sell a single product. During the last year, 30,000 units were produced and 25,000 units were sold. The finished goods inventory account at the end of the year shows a balance of $85,000 for the 5,000 unsold units. CHECK FIGURE (2b) Fixed cost deferred in ending inventory: $15,000 Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses Fixed costs per year: Fixed manufacturing overhead $ 90,000 Fixed selling and administrative expenses 300,000 Required: 1. Is the company using absorption costing or variable costing to cost units in the finished goods inventory account? Show computations to support your answer. 2. Assume that the company wishes to prepare financial statements for the year to issue to its shareholders. a. Is the $85,000 figure for finished goods inventory the correct amount to use on these statements for external reporting purposes? Explain. b. At what dollar amount should the 5,000 units be carried in inventory for external reporting purposes? PROBLEM 88-3 Producine Variable and Abenda-and- Question 6 1/1 pts Biological and psychological views may overlap, but also have very unique characteristics True False action 7 1/1 pts