PROVIDING JUST THE ANSWERS SHOULD BE ENOUGH (NO NEED FOR SOLUTION STEPS):

Sparn Limited incurs the following costs to produce and sell a single product. During the last year, 35,000 units were produced and 27, 800 units were sold. The finished goods inventory account at the end of the year shows a balance of $396,000 for the 7, 200 unsold units. Required: 1.1 Is the company using absorption costing or variable costing to cost units in the finished goods inventory account? Absorption costing Variable costing 1.2 Show computations to support your answer. (Omit the "$"sign in your response.) 2. Assume that the company wishes to prepare financial statements for the year to issue to its shareholders a. Is the $396,000 figure for finished goods inventory the correct amount to use on these statements for external reporting purposes? Yes No b. At what dollar amount should the 7, 200 units be carried in inventory for external reporting purposes? (omit the "$" sign in your response.) Dollar amount $ _____