Trez Company began operations this year. During this year, the company produced $100,000$ units and sold $80,000$ units. The

absorption costing income statement for this year follows.

Additional Information

a$.$ Selling and administrative expenses consist of $$400,000$ in annual fixed expenses and $$2\mathrm{.}25$ per unit in variable selling and

administrative expenses.

b$.$ The company's product cost of $$25$ per unit consists of the following.

Direct materials

Direct labor

Variable overhead

Fixed overhead units