Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement Sales (42,000 units x $44.10 per unit) Cost of goods sold (42,000 units $24 per unit) Gross margin Selling and administrative expenses Net operating income $1,852,200 1,008,000 844,200 441,000 $403,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $3 per unit sold in variable expenses. The $24 unit product cost given above is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($282,00047,000 units) Absorption costing unit product cost $ 11 6 $ 24