1. During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $290,000. The company produced 29,000 units, and sold 19,500 units, leaving 9,500 units in inventory at year-end. Income calculated under variable costing is determined to be $365,000. How much income is reported under absorption costing?

a. 365000

b. 270000

c. 655000

d. 460000

e. 329000

2. Zhang Industries sells a product for $725 per unit. Unit sales for May were 900 and each month's unit sales are expected to grow by 4%. Zhang pays a sales manager a monthly salary of $4,100 and a commission of 3% of sales. Compute the budgeted selling expense for the manager for the month ended June 30.

a. 22892

b. 24458

c. 23675

d. 31505

e. 12494