Albany Inc., planned and actually manufactured 240,000 units of its single product in 2017, its first year of operation. Variable manufacturing cost was $24 per unit produced. Variable operating (nonmanufacturing) cost was $10 per unit sold. Planned and actual fixed manufacturing costs were $720,000. Planned and actual fixed operating (nonmanufacturing) costs totaled $380,000. Albany sold 120,000 units of product at $45 per unit.

Account for Albany's 2017 operating income using absorption costing is (a) $580,000, (b)$220,000, (c)$600,000, (d) $960,000, or (e) none of these. Show supporting calculations.

Problem E9-26