The following income statements are provided for Li Company's last two years of operation: Year 1 Year 2Number of units produced and sold 3,500 3,000 Sales revenue$101,500 $87,000 Cost of goods sold 68,000 60,000 Gross margin 33,500 27,000 General, selling, and administrative expenses 13,000 12,000 Net income$20,500 $15,000 Assuming that cost behavior did not change over the two-year period, what is the company's annual fixed general, selling, and administrative cost?
A. $2,500
B. $6,500
C. $6,000
D. $3,000
Answer: C
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