Morey Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below: MOREY COMPANY Income statement Sales (40,000 units at $33.75 per unit) Cost of goods sold: Beginning inventory Add cost of goods manufactured (50,000 units at $21 per unit) Goods available for sale Less ending inventory (10,000 units at 521 per unit) Gross margin Selling and administrative expenses Operating incone $1,350.000 1,050,000 1,050,000 210,000 840,000 510,000 420,000 90,000 The company's selling and administrative expenses consist of $300,000 per year in fixed expenses and $3 per unit sold in variable expenses. The company's $21 per unit product cost given above is computed as follows: Direct materials $10 Direct labour. Variable manufacturing overhead. Fixed manufacturing overhead 15250,000 50,000 units) 3 Unit product cost $21