Sparn Limited incurs the following costs to produce and sell a single product: $ 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 and administrative expenses 20 6 4 154,400 490,560 During the last year, 38,600 units were produced and 32,700 units were sold. The Finished Goods Inventory account at the end of the year shows a balance of $177,000 for the 5,900 unsold units. Required: 1-0. Is the company using absorption costing or variable costing to cost units in the Finished Goods Inventory Account? Absorption costing O Variable costing 1-b. Show computations to support your answer Absorption costing O Variable costing 1-b. Show computations to support your answer. Variable Absorption Costing Costing Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Unit product cost Total cost, 5,900 units $ 1$