Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: Columbia CorporationIncome StatementFor the Month ended November 30Sales ($30 per unit)$1,200,000Variable expenses: Variable cost of goods sold 720,000Variable selling expense 160,000Total variable expenses 880,000Contribution margin 320,000Fixed expenses: Manufacturing 140,000Selling and administrative 35,000Total fixed expenses 175,000Net operating income$145,000 During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months. Under absorption costing, for November the company would report a:
A. $125,000 profit
B. $125,000 loss
C. $145,000 profit
D. $120,000 profit
Answer: A
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