During This Past Year, Bouncy Company Experienced No Change in Inventory

Multiple Choice

During this past year, Bouncy Company experienced no change in inventory. Sales were 40,000 units at a selling price of £3 per unit. Variable manufacturing costs were £1.25 per unit, and total manufacturing costs were £55,000. Under absorption costing, net income was calculated at £53,000. What was net income under variable costing?

A) £65,000
B) £55,000
C) £53,000
D) £2,000