Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below Whitman Company Statement Sales (40,000 units $42.10 per unit) Cost of goods sold (40,000 unis $23 per unit) Gross margin Selling and administrative expenses Net operating income 1,684,000 920,000 764,000 420,000 S 344,000 The company's selting and administrative expenses consist of $300,000 per year in fxed expenses and $3 per unit sold in variable expenses. The $23 per unit product cost given above is computed as follows S 11 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($282,000 47,000 units) Absorption costing unit product cost $ 23