Bella, Inc

Bella, Inc. has operated for 2 years. During that time it produced 1,000 units in year 1 and 800 in year 2, while sales were 800 units in year 1 and 900 in year 2. Variable production costs were $8 per unit during both years. The absorption costing income statements for these 2 years were: Year 1 Year 2
Sales $16,000 $18,000
Less cost of goods sold:
Beginning inventory $ 0 $ 2,200
Product costs 11,000 9,400
Ending inventory (2,200) 8,800 (1,175) 10,425
Gross profit 7,200 7,575
Less operating expenses:
Variable 1,200 1,350
Fixed 5,000 6,200 5,000 6,350
Operating income $ 1,000 $ 1,225
Operating income for year 1 using variable costing would be:

A) $1,600
B) $(2,800)
C) $2,200
D) $400