Carr Company produces a single product. During the past year, Carr manufactured 25,000 units and sold 20,000 units. Production costs for the year were as follows:

Fixed mannufacturing overhead $250,000

Variable manufacturing overhead $210,000

Direct labor $120,000

Direct materials $ 180,000

Sales totaled $850,000, variable selling expenses totaled $110,000, and fixed selling and administrative expenses totaled $170,000. There were no units in beginning inventory. Assume that direct labor is a variable cost.

The contribution margin per unit would be:

(a)$12.10

(b) $22.10

(c) $17.70

(d) $16.60

Under absorption costing, the ending inventory for the year would be valued at:

(a) $179,500

(b)$213,500

(c) $222,000

(d) $152,000

The net operating income for the year under variable costing would be:

(a) $28,000 lower than under absorption costing

(b) $28,000 higher than under absorption costing

(c) $50,000 lower than under absorption costing

(d) $50,000 higher than under absorption costing