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 18 7 5 5 222,500 520,600 During the last year, 44,500 units were produced and 27,400 units were sold. The Finished Goods Inventory account at the end of the year shows a balance of $168,000 for the 5,600 unsold units. Required: 1-a. 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. Direct materials Direct labour Variable Absorption Costing Costing