Leesburg Bags produces backpacks. The costs and prices for the backpacks follow (Assume the same unit costs in all years):
Selling price $23.00 per backpack
Variable costs: Production $10.00 per backpack selling $2.00 per backpack
Fixed Costs: Production $900,000 per year Selling and administrative $540,000 per year Leesburg Bags produced 250,000 backpacks for the year and sold 200,000. There was no beginning inventory, and costs throughout the year were stable. How much is net income under variable costing?
a) $550,000
b) 680,000
c) 600,000
d) 500,000