Chairry's is a direct marketer of popular music. The following information about its revenue and cost structure is available:

Selling Price	$13.00 per CD
Variable Costs:
Production	$ 3.00 per CD
Selling and Administration	$ 1.00 per CD
Fixed Costs:
Production	$1,000,000 per year
Selling and Administration	$3,000,000 per year

Assume that 500,000 CDs are produced and 450,000 are sold in 2008. What is income under Variable Costing?

	A	$50,000
	B	$500,000
	C	$150,000
	D	$1,850,000