Favaz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $9; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $2; and fixed selling and administrative costs, $220,000. The company sells its units for $45 each. Additional data follow:Planned production in units10,000Actual production in units10,000Number of units sold8,500There were no variances.The income (loss) under absorption costing is:
A. $(7,500).
B. $18,000.
C. $15,000.
D. $9,000.
E. None of the answers is correct.
Answer: B
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