5 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 Tixed selling and administrative expenses 10 5 2 4 03:37:52 90,000 300,000 eBook Print During the last year, 30,000 units were produced and 25,000 units were sold. The Finished Goods Inventory account at the end of the year shows a balance of $85,000 for the 5,000 unsold units. Required: 1-a. Is the company using absorption costing or variable costing to cost units in the Finished Goods Inventory account? Herences Absorption costing Variable costing 1-b. Show computations to support your answer. Variable Costing Absorption Costing Direct materials Direct labour Variable manufacturing overhead Fibed manufacturing overhead Unit product cost Total cost 5,000 units