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 Full Costing?

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