McCoy Corporation Manufactures a Computer Monitor

Multiple Choice

McCoy Corporation manufactures a computer monitor. Shown below is McCoy's cost structure: In its first year of operations, McCoy produced 100,000 monitors but only sold 95,000. McCoy's gross margin in this first year was $2,629,600. McCoy's contribution margin in this first year was $2,109,000.
Under absorption costing, what is McCoy's net operating income for its first year?

A) $266,000
B) $786,600
C) $1,261,600
D) $2,173,600