A Manufacturing Company Is Studying the Feasibility of Producing a New

Multiple Choice

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $56. The new production line would manufacture up to 95,000 units at a variable cost of $35 per unit. Fixed costs would be $400,000. Variable selling and administration expenses would amount to $7. Determine operating income at 95% capacity.

A) $863,500
B) $874,500
C) $885,500
D) $895,500
E) $905,500