McCoy Corporation manufactures a computer monitor. Shown below is McCoy's cost structure: Variable cost per monitorTotal fixed cost for the yearManufacturing cost$75.20$912,000 Selling and administrative$14.60$456,000 In its first year of operations, McCoy produced 100,000 monitors but only sold 95,000. McCoy's gross margin in this first year was $2,629,600. McCoy's contribution margin in this first year was $2,109,000.Under absorption costing, what is McCoy's net operating income for its first year?
A. $786,600
B. $266,000
C. $1,261,600
D. $2,173,600
Answer: A
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