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Question(s) / Instruction(s):

A company produces a single product. Last year, fixed manufacturing overhead was $30,000, variable production costs were $48,000, fixed selling and administration costs were $20,000, and variable selling administrative expenses were $9,600. There was no beginning inventory. During the year, 3,000 units were produced and 2,400 units were sold at a price of $40 per units Under variable costing, net operating income would be:

a)            a profit of $6,000

b)            a profit of $4,000

c)            a loss of $2,000

d)            a loss of $4,400

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