Number of units produced annually	25,000
Variable Costs Per Unit:
Direct Materials, Direct Labor & Variable Mfg. Overhead	$10
Selling & Admin Expenses	$3
Fixed Costs Per Unit
Manufacturing overhead	$150,000
Selling & Admin Expenses	$100,000

When the company sold 20,000 units for 20 dollars, what is gross margin based on Absorption Costing? Assume there is no beginning inventory.

$ (80,000)

$ 140,000

$ 200,000

$ 80,000