During its first year of operation Salon Manufacturing Company sold 1,000 units of inventory. Salon incurred variable product cost of $4 per unit and $1,875 of fixed manufacturing overhead costs. The sales price of the products was $6 per unit. Salon uses absorption costing. Based on this information Salon will report net income of

Multiple Choice

a. $500 if the company made 1,250 units of product during the year

b.$750 if the company made 1,500 units of product during the year.

c. $1,000 if the company made 1,875 units of product during the year.

d. All of the answers are correct.