Aerotrino Produces and Sells Popular T-Shirts During 2017, the Company Produced 400,000 T-Shirts and Sold 350,000

Multiple Choice

Aerotrino produces and sells popular t-shirts.Following is information about its t-shirts for 2017: $\begin{array}{lr}\text { Selling price } & \$ 15.00 \text { per t-shirt } \\\text { Variable costs: } & \\ \text { Production (manufacturing costs) } & \$ 3.00 \text { per t-shirt }\\\text { Selling } \& \text { administration } & \$ 1.00 \text { per t-shirt } \\\text { Fixed costs: } & \\\text { Production (manufacturing costs) } & \$ 1,000,000 \text { per year } \\\text { Selling \& administration } & \$ 2,000,000 \text { per vear }\end{array}$ During 2017, the company produced 400,000 t-shirts and sold 350,000 of them.Assume that there was no beginning inventory.How much is the net income under variable costing?

A) $975,000
B) $1,400,000
C) $850,000
D) $2,250,000