A. This answer results from multiplying the variable manufacturing cost per unit  by the number of units produced instead of by the number of units sold.

B. Under variable costing, all of the fixed factory overheads will be expensed during the period. The manufacturing contribution per unit is calculated as the sales price ($10) minus the variable costs of production ($5.50) and is $4.50. Since they sold 1,000 units, this gave them $4,500 of contribution margin before the fixed costs and non product costs. Fixed manufacturing ($1,200) and fixed selling costs ($1,000) are subtracted as is the variable selling and administrative costs of $.50 per unit, or $500. Subtracting these costs from the contribution margin gives an operating income of $1,800.

C. This answer results from not deducting the variable selling and administrative costs.

D. This answer results from multiplying the variable manufacturing cost per unit and the variable selling and administrative cost per unit by the number of units produced instead of by the number of units sold.