Units produced	410	units
Units sold	460	units
Sales price	$150	per unit
Direct materials	$30	per unit
Direct labor	$10	per unit
Variable manufacturing overhead	$16	per unit
Fixed manufacturing overhead	$15,300	per year
Variable selling and administrative costs	$10	per unit
Fixed selling and administrative costs	$13,500	per year

The beginning Finished Goods Inventory costs were $3,500 under absorption costing and $2,800 under variable costing.

What is the operating income using variable costing?

A.

$9,840

B.

$2,340

C.

$38,640

D.

$40,200

Peter Smith has just won the state lottery and has the following three payout options for after-tax prizemoney:

1. $64,000 per year at the end of each of the next six years

2. $304,000 (lump sum) now

3. $502,000 (lump sum) six years from now

The annual discount rate is 9%. Compute the present value of the third option. (Round to nearest wholedollar.)

Present value of $1:

	8%	9%	10%
1	0.926	0.917	0.909
2	0.857	0.842	0.826
3	0.794	0.772	0.751
4	0.735	0.708	0.683
5	0.681	0.650	0.621
6	0.630	0.596	0.564
7	0.583	0.547	0.513

A.

$240,000

B.

$299,192

C.

$98,133

D.

$101,717