1. A business operated at 100% of capacity during its first month, with the following results:

   Sales (90 units)		$90,000
   Production costs (100 units):
   Direct materials	$40,000
   Direct labor	20,000
   Variable factory overhead	2,000
   Fixed factory overhead	7,000	69,000
   Operating expenses:
   Variable operating expenses	$ 8,000
   Fixed operating expenses	1,000	9,000

   What is the amount of the gross profit that would be reported on the absorption costing income statement?

   	a.	$18,900
   	b.	$27,900
   	c.	$18,000
   	d.	$21,000