year 1 shows a balance of 85000 for the 5000 unslod units

Twyla Ltd incurs the following cost to produce and sell a single unit $ 10 $ 5 Variable costs per unit: Direct materials Direct labour Variable MOH Variable selling & admin Fixed costs per year: Fixed MOH Fixed selling & admin $2 $4 $ 180,000 300,000 The following chart outlines the inventory for the past two years. Units in beginning inventory Units produced Units sold Units in ending inventory Year 1 10,000 30,000 35,000 5,000 Year 2 5,000 30,000 21,000 14,000 The Finished Goods Inventory account at the end of the year shows a balance of $85,000 fc equired: ) Is the company using absorption costing or variable costing to cost units in the Finished entory account? he following to support your answer. Variable Costing $ 10 $ 5 $ 2 Absorption Costing $ 10 Direct materials Direct labour Variable MOH Fixed MOH Unit product cost Total cost for 5,000 units $ 5 $ 2 2. Assume that the company wishes to prepare financial statements for the year to issue a. Is the $85,000 figure for finished goods inventory the correct amour external reporting purposes? to use for year b. What will be the ending inventory dollar value reported on the external financial sta 3. Reconcile the operating income between the two costing systems for year 1 and yea he absorption costing method has been given for both years