Fields Cutlery,a Manufacturer of Gourmet Knife Sets,produced 20,000 Sets and Sold

Multiple Choice

Fields Cutlery,a manufacturer of gourmet knife sets,produced 20,000 sets and sold 23,000 units during the current year.Beginning inventory under absorption costing consisted of 3,000 units valued at $66,000 (Direct materials $12 per unit; Direct labor,$3 per unit; Variable Overhead,$2 per unit,and Fixed overhead,$5 per unit.) All manufacturing costs have remained constant over the 2-year period.At year-end,the company reported the following income statement using absorption costing: 60% of total selling and administrative expenses are variable.Compute net income under variable costing.

A) $414,000
B) $399,000
C) $529,000
D) $429,000
E) $644,000