18)

During its first year of operations, Carlos Manufacturing Corporation incurred the following costs to produce 8,000 units of its only product:

Direct materials	$7 per unit
Direct labor	$3 per unit
Variable manufacturing overhead	$18 per unit
Fixed manufacturing overhead	$450,000 in total

The company also incurred the following costs in selling 7,500 units of product during its first year:

Variable selling and administrative	$2 per unit
Fixed selling and administrative	$60,000 in total

Assume that direct labor is a variable cost. If Carlos' absorption costing net operating income for this first year is $118,125, what would its variable costing net operating income be for this first year?

A) $104,125

B) $146,250

C) $90,000

D) $86,000