1. Ofarrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March.

Sales (5,000 units)	$205,000
Variable expenses	125,000
Contribution margin	80,000
Fixed expenses	62,400
Net operating income	$17,600

If the company sells 5,400 units, its net operating income should be closest to:

A)$ 19,008 B) $17,600 C)$ 24,000 D)$ 34,000

2. An example of a period cost is:

A) Fire insurance on a factory building

B) Salary of a factory supervisor

C) Direct materials

D) Rent on headquarters building