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 $ 35 7 3 5 219,000 469,200 During the last year, 43,800 units were produced and 27,600 units were sold. The Finished Goods Inventory account at the end of the year shows a balance of $243,000 for the 5,400 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 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, 5,400 units Variable Costing Absorption Costing $ 0