The results of operations for the Garret Bug Spray Manufacturing Company for the fourth quarter of 2014 were as follows (in thousands):

Sales of bug spray			$500,000
Less variable cost of goods sold			$280,000
Contribution margin			$220,000
Less fixed production costs $90,000
Less fixed selling and administrative expenses	$50,000	$140,000
Income before taxes			$80,000
Less taxes on income			$32,000
Net income			$48,000

Note: Garret uses the variable costing method. Therefore, only variable costs are included in the cost of

goods sold. Fixed costs are charged to expense in the period incurred.

The company