4. Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows:

Direct materials	$25,000
Direct labor	35,000
Variable factory overhead	12,000
Fixed factory overhead	37,000
Variable selling expense	9,000
Fixed selling expense	7,500
Fixed administrative expense	15,500

Fixed factory overhead is applied based on expected production. Last year, Fabre expected to produce 20,000 units.

Refer to Figure 8-1. What is operating income for last year under variable costing?

a.$111,800

b.$78,400

c.$91,780

d.$66,350

e.$82,200

5.

Loring Company had the following data for the month:

Variable costs per unit:
Direct materials	$4.00
Direct labor	3.20
Variable overhead	1.00
Variable selling expenses	.40

Fixed overhead is $4,000 per month; it is applied to production based on normal activity of 2,000 units. During the month, 2,000 units were produced. Loring started the month with 300 units in beginning inventory, with unit product cost equal to this month's unit product cost. A total of 2,100 units were sold during the month at price of $14. Selling and administrative expense for the month, all fixed, totaled $3,600.

Refer to Figure 8-2. What is the unit product cost under absorption costing?

a.$10.60

b.$8.60

c.$8.20

d.$10.20

e.$7.20