Last Year, Ella Company Produced 10,000 Units and Sold 9,000

Multiple Choice

Last year, Ella Company produced 10,000 units and sold 9,000 units at a price of $9 per unit. Costs for last year were as follows:
Fixed factory overhead is applied on the basis of expected production. Last year, Ella expected to produce 10,000 units.
$$\begin{array} { l r } \text { Direct materials } & \$ 10,000 \\\text { Direct labour } & 15,000 \\\text { Variable factory overhead } & 5,000 \\\text { Fixed factory overhead } & 20,000 \\\text { Variable selling expense } & 7,200 \\\text { Fixed selling expense } & 5,000 \\\text { Fixed administrative expense } & 12,000\end{array}$$
-Refer to the Figure.What is the operating income for last year under absorption costing?

A) $11,300
B) $11,800
C) $12,520
D) $36,000