During its first year of operations, the McCormick Company Incurred the following manufacturing costs:

Direct materials :$5 per unit

Direct labor $3 per unit

Variable overhead Fixed overhead

$ 4 per unit

$ 250,000 per year

The company produced 25,000 units, and sold 20,000 units, leaving 5,000 units in Inventory at year-end. Income calculated under varable costing is determined to be $315,000. How much income is reported under absorption costing?

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