1. A business operated at 100% of capacity during its first month and incurred the following costs:

   Production costs (19,000 units):
   Direct materials	$174,300
   Direct labor	221,400
   Variable factory overhead	249,500
   Fixed factory overhead	103,000	$748,200
   Operating expenses:
   Variable operating expenses	$132,300
   Fixed operating expenses	43,900	176,200

   If 1,800 units remain unsold at the end of the month, the amount of inventory that would be reported on the absorption costing balance sheet is

   a.$87,575

   b.$70,866

   c.$73,658

   d.$61,124