Question 4

Baraban Corporation has provided the following data for its most recent year of operation:

Selling price per unit	$	47
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials	$	10
Direct labor	$	6
Variable manufacturing overhead	$	5
Fixed manufacturing overhead per year	$	130,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold	$	5
Fixed selling and administrative expense per year	$	63,000

Units in beginning inventory	0
Units produced during the year	10,000
Units sold during the year	9,000
Units in ending inventory	1,000

The net operating income (loss) under absorption costing closest to:

		($4,000)
		$9,000
		$117,000
		$72,000