Panda, Which Began Business at the Start of 2012, Had

Multiple Choice

Panda, which began business at the start of 2012, had the following data: Planned and actual production: 100,000 units
Sales: 80,000 units at $20 per unit
Production costs: Variable $6 per unit; Fixed $300,000
Selling and administrative costs: Variable $1 per unit; Fixed $32,000
The gross margin that Panda Company would disclose on its 2012 absorption-costing income statement is:

A) $0.
B) $700,000.
C) $880,000.
D) $1,300,000.
E) $1,600,000.