Assume the following information for a company that produced 10,000 units and sold 8,000 units during its first year of operations and produced 8,000 units and sold 10,000 units during its second year of operations:

	Per Unit	Per Year
Selling price	$ 200
Direct materials	$ 84
Direct labor	$ 50
Variable manufacturing overhead	$ 9
Sales commission	$ 8
Fixed selling and administrative expense		$ 110,000
Fixed manufacturing overhead		$ 300,000

Using absorption costing, what is the net operating income for the second year of operations?

Multiple Choice

$70,000

$40,000

$20,000

$50,000