#26-35 Study The following information is available for January: Per Unit Per Month Selling Price $100,000 Direct Material $20,000 Direct Labor $10,000 Variable manufacturing overhead $15,000 Variable SG&A $5,000 Fixed Manufacturing overhead $50,000 Fixed SG&A $30,000 There was no beginning inventory, and five units were produced. What is January's net income under absorption costing if there three units were sold? Step 1: Calculate the product costs DM = $20,000 * 3 = $60,000 DL = $10,000 * 3 = $30,000 OH = $15,000 * 3 = $45,000 OH = $30,000 $165,000 NI = $300,000- 165,000 - 30,000 - 15,000 = 90,000