Item 3

Favaz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $8; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $2; and fixed selling and administrative costs, $231,000. The company sells its units for $45 each. Additional data follow:

Planned production in units	10,000
Actual production in units	10,000
Number of units sold	8,500

There were no variances. The income (loss) under variable costing is:

Multiple Choice

• $(7,500).

• $6,500.

• $12,500.

• $15,500.

• None of the answers is correct.