The Colin Division of Mochrie Company sells its product for $30 per unit. Variable costs per unit are:

manufacturing, $12; and selling and administrative, $2. Fixed costs are: $200,000 manufacturing

overhead, and $50,000 selling and administrative. There was no beginning inventory. Expected

sales for next year are 40,000 units. Ryan Stiles, the manager of the Colin Division, is under

pressure to improve the performance of the Division. As he plans for next year, he has to decide

whether to produce 40,000 units or 50,000 units. What would the net income be under variable

costing for each alternative