The following data relate to Smurf Corporation for the year just ended:

Sales $550,000

Cost of Goods Sold:

Variable Portion 170,000

Fixed Portion 110,000

Variable selling and administrative cost of 50,000

Fixed selling and administrative cost of 125,000

Which of the following statements is correct?

A. Smurf's variable-costing income statement would reveal a gross margin of $270,000.

B. Smurf's variable costing income statement would reveal a contribution margin of $330,000.

C. Smurf's absorption-costing income statement would reveal a contribution margin of $220,000.

D. Smurf's variable costing income statement would reveal a gross margin of $330,000.