Sparn Limited incurs the following costs to produce and sell a single product: $ 34 7 2 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 4 224,000 564,900 During the last year, 32,000 units were produced and 26,900 units were sold. The Finished Goods Inventory account at the end of the year shows a balance of $219,300 for the 5,100 unsold units. Required: 1-a is the company using absorption costing or variable costing to cost units in the Finished Goods Inventory account? O Absorption costing O Variable costing 1-b Show computations to support your answer. Variable Costing Absorption Costing Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Unit product cost Total cost, 5,100 units $ 0 $ 0 2. Assume that the company wishes to prepare financial statements for the year to issue to its shareholders. a. Is the $219,300 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 5,100 units be carried in inventory for external reporting purposes? Finished goods inventory account