Arca Company reports the following for its product for its first year of operations.

Direct materials	$ 87	per unit
Direct labor	$ 67	per unit
Variable overhead	$ 37	per unit
Fixed overhead	$ 104,160	per year
Variable selling and administrative expenses	$ 7	per unit
Fixed selling and administrative expenses	$ 57,000	per year

The company sells its product for $385 per unit. Compute gross profit using absorption costing assuming the company produces and sells 2,170 units.

Multiple Choice

• $835,450

• $334,180

• $494,760

• $316,820

• $221,340