Margaret is studying the working papers from her client's 2025 income statement because her manager wants her to reconstruct that same income statement without the benefit of first seeing the finished product. She knows the client uses standard costing within its accounting system, but she has to figure out which inventory costing method it uses. The working paper shows the following details. No other variances were reported, and the prior year per-unit costs were the same as the 2025 per-unit costs. Gross margin $2,864 Sales volume Budgeted production 190 units 210 units Beginning FG Inventory 27 units Ending FG Inventory 39 units Fixed-MOH volume variance (unfavorable) $176 Operating income $570 Sales $14,250 (a1) Your answer is correct. Which inventory costing method did the client use in 2025, variable or absorption? Absorption Costing eTextbook and Media (b) Your answer is incorrect. How much did the client capitalize into inventory on a per-unit basis? Inventory cost per unit $ 74.03