Spam Limited incurs the following costs to produce and sell a single product: Variable costs per unit: Direct materials $ 33 Direct labour 12 Variable manufacturing overhead 7 Variable selling and administrative expenses 5 Fixed costs per year: Fixed manufacturing overhead 270,000 Fixed selling and administrative expenses 632,700 During the last year, 54,000 units were produced and 33,300 units were sold. The Finished Goods Inventory account at the end ofthe year shows a balance of $358,800 for the 6,900 unsold units. Required: 1-a. Is the company using absorption costing or variable costing to cost units in the Finished Goods Inventory account? 0 Absorption costing 0 Variable costing 1-b. Show computations to support your answer. Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead - - Unit product cost Total cost, 6,900 units 2. Assume that the company wishes to prepare financial statements for the year to issue to its shareholders. a. Is the $358,800 figure for finished goods inventory the correct amount to use on these statements for external reporting purposes? Yes O No b. At what dollar amount should the 6,900 units be carried in inventory for external reporting purposes? Inventory value for external reporting purposes