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		$	75
Direct labor		$	50
Variable manufacturing overhead		$	10
Sales commission		$	8
Fixed selling and administrative expense						$	110,000
Fixed manufacturing overhead						$	300,000

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

Multiple Choice

• $140,000

• $150,000

• $130,000

• $160,000