Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customer's ear. Cost data for the product follow:

Variable costs per unit: Direct materials 1=1 Direct labour 17 Variable factory overhead 11 Variable selling and administrative Total variable costs per unit 42 Fixed costs per month: Fixed manufacturing overhead $ 252. 000 Fixed selling and administrative 168, 000 Total fixed cost per month $ 420, 000\fMay June Sales $1, 024, 000 $1, 664, 000 Cost of goods sold: Beginning inventory O 235, 000 Add cost of goods manufactured 987, 000 987, 000 Goods available for sale 987, 000 1, 222, 000 Less ending inventory 235, 000 0 Cost of goods sold 752, 000 1, 222, 000 Gross margin 272, 000 442, 000 Selling and administrative expenses 280, 000 350, 000 Operating income $ (8, 000) 92. 000\fMay June Sales Variable expenses: Variable cost of goods sold: Beginning inventory Add: Variable production costs Goods available for sale 0 0 Less: Ending inventory Cost of goods manufactured 0 0 Variable selling and administrative Total variable expenses C Contribution margin 0 0 Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Total fixed expenses 0 0 Operating income (loss) 0 0May June Variable costing operating income (loss) Add: Cost deferred in inventory under absorption costing Deduct: Cost released from inventory under absorption costing Absorption costing operating income 0 $ 0