B. This answer is incorrect. Please see the correct answer for an explanation.

C. This answer assumes that the fixed overhead applied was applied only to the units that were sold, and not to the number of units that were produced.

D. For each unit that is sold, $5 of fixed overhead is expensed as cost of goods sold. There were 125,000 units sold, so this is $625,000 in cost of goods sold related to the units sold. We are also told that under- or overapplied overhead is allocated to cost of goods sold. Therefore, we need to calculate the under- or overapplied overhead. There was a total of $650,000 of fixed overhead applied during the period (130,000 units produced and $5 per unit). The actual fixed overhead was $715,000, so fixed overhead was underapplied by $65,000. This $65,000 of underapplied overhead will be added to cost of goods sold. Also, all of the fixed selling and fixed administrative costs were expensed during the period because these are period costs. These costs total $1,405,000. The total fixed costs expensed equals $625,000 + $65,000 + $1,405,000, or $2,095,000.