Assume a company reported the following information for this year:

Budgeted $($estimated$)$ production $80,000$ units

Budgeted sales $80,000$ units

Production capacity $100,000$ units

Selling price $ $25$ per unit

Variable manufacturing cost $ $12$ per unit

Estimated total manufacturing overhead cost $($all fixed$)$ $ $700,000$

Selling and administrative expenses $($all fixed$)$ $ $250,000$

Beginning inventories $ $0$

Using a predetermined overhead rate based on capacity with $$units produced$$ as the allocation base, the company$$s budgeted income statement would report a gross margin that is closest to:

Multiple Choice

$$1,300,000$

$$480,000$

$$340,000$

$$90,000$