Sparn Limited incurs the following costs to produce and sell a single product: During the last year, 47,200 units were produced and 33,400 units were sold. The Finished Goods Inventory account at the end of the year shows a balance of $133,400 for the 4,600 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 Variable costing 1-b. Show computations to support your answer. 2. Assume that the company wishes to prepare financial statements for the year to issue to its sharehoiders. a. Is the $133,400 figure for finished goods inventory the correct amount to use on these statements for external reporting purposes? Yes No b. At what dollar amount should the 4,600 units be carried in inventory for external reporting purposes