Answer the Following Questions Using the Information Below:
Jindabyne Pillows

Multiple Choice

Answer the following questions using the information below:
Jindabyne Pillows produces and sells a decorative pillow for $75.00 per unit.In the first month of operation,
2000 units were produced and 1750 units were sold.Actual fixed costs are the same as the amount budgeted for the month.Other information for the month includes:
$\begin{array}{lr}\text { Variable manufacturing costs } & \$ 20.00 \text { per unit } \\\text { Variable marketing costs } & \$ 3.00 \text { per unit } \\\text { Fixed manufacturing costs } & \$ 7.00 \text { per unit } \\\text { Administrative expenses, all fixed } & \$ 15.00 \text { per unit }\\\text { Ending inventories: }\\\text { Direct materials } & -0- \\\text { WIP } & -0- \\\text { Finished goods } & 250 \text { urits }\end{array}$
-What is 'operating profit' using variable costing?

A) $78 750
B) $65 750
C) $52 500
D) $47 000