Mandato Corporation has provided the following data for its two most recent years of operation: Selling price per unit$50 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials$10Direct labor$6Variable manufacturing overhead$5Fixed manufacturing overhead per year$72,000Selling and administrative expenses: Variable selling and administrative expense per unit sold$5Fixed selling and administrative expense per year$70,000 Year 1Year 2Units in beginning inventory03,000Units produced during the year9,0008,000Units sold during the year6,0009,000Units in ending inventory3,0002,000The net operating income (loss) under absorption costing in Year 1 is closest to:
A. $126,000
B. $2,000
C. $26,000
D. $96,000
Answer: C
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