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4 Fairground, Inc. is a manufacturer. During its first year of operations, the firm produced 21,600 units and sold 18,900 units at a sales price

4 Fairground, Inc. is a manufacturer. During its first year of operations, the firm produced 21,600 units and sold 18,900 units at a sales price of $32.50 per unit. The firm incurred the following manufacturing costs: Direct materials, $17.50 per unit; Direct labor, $6.25 per unit; Variable factory overhead, $2.75 per unit; and, Fixed overhead, $32,400 total. First year income reported under variable costing is determined to be $73,900. How much income is reported for the first year under absorption costing?

  1. $73,900
  2. $69,850
  3. $77,950 (correct)
  4. $81,000
  5. $85,050

On the answer key, C is correct but I keep getting D and am unsure as to why I am wrong.

Thank you!

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