Weezer Plastics produces one product that it sells for $20 per unit. The company produces 100,000 units annually, which represents the maximum capacity available. The 2016 income statement is as follows:

Sales (100,000 units) Variable costs: Direct materials Direct labor Selling and marketing Contribution margin Fixed costs: Production Factory rent Administrative salaries Net income before taxes $400,000 200,000 300,000 $ 75,000 60,000 100,000 $2,000,000