Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations, 100,000 units were produced and 95,000 units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows:

	Fixed Costs	Variable Costs
Raw materials	--	$1.55 per unit produced
Direct labour	--	1.25 per unit produced
Factory overhead	$100,000	0.50 per unit produced
Selling and administrative	70,000	0.80 per unit sold

What was Indiana Corporation's operating income for the year using variable costing?

Multiple Choice

• $181,000.

• $271,000.

• $276,500.

• $295,500.