At the beginning of the year, Smith Inc. budgeted the following:

Units8,000

Sales$100,000

Minus

Total variable expenses60,000

Total fixed expenses20,000

Net income$20,000

Factory Overhead

Variable$30,000

Fixed10,000

There were no beginning inventories. At the end of the year, no work was in process, total actual factory overhead incurred was $37,500 versus the $40,000 estimated.Total applied overhead for the year was $39,000 and it was applied on the basis of budgeted unit production.Factory overhead was applied on the basis of budgeted unit production.How many units were produced this year?

A7,200

B 8,000

C 7,800

D 7,500