Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below: Whitman Company Income Statement 1,726,100 Sales (41,000 units x $42.10 per unit) 902,000 Cost of goods sold (41,000 units x $22 per unit) 824,100 Gross margin 430,500 Selling and administrative expenses Net operating income 393,600 The company's selling and administrative expenses consist of $307,500 per year in fixed expenses and $3 per unit sold in variable expenses. The $22 per unit product cost given above is computed as follows: 10 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($230,000 46,000 units) $22 Absorption costing unit product cost