A business operated at 100% of capacity during its first month and incurred the following costs Production costs (10,000 units): Direct materials $170,000 Direct labor 360,000 Variable factory overhead 190,000 Fixed factory overhead 50,000 $770,000 Operating expenses: Variable operating expenses $60,000 Fixed operating expenses 18,000 78,000 . If 500 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is a. $38,500 b. $42,800 c. $36,000 d. $41,500