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

   Sales (100 units)		$570,000
   Production costs (125 units):
   Direct materials	$77,021
   Direct labor	19,665
   Variable factory overhead	34,414
   Fixed factory overhead	32,775	163,875
   Operating expenses:
   Variable operating expenses	$5,453
   Fixed operating expenses	3,430	8,883

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

   a.$430,017

   b.$438,900

   c.$569,875

   d.$433,447