Answer:
Option A,$257,732 is correct
Explanation:
The computation of income from operations requires that the operating expenses(variable operating expenses and fixed operating expenses) be deducted in the current period as against charging a portion to closing inventory as it is obtainable under the absorption costing method:
Direct materials                                            $180,100
Direct labor                                                   $238,100
Variable factory overhead                            $261,800
Total prime costs                                              $680,000  
Less closing stock(1900*$680,000/18200)    ($70,989)  
Costs of good sold                                            $609,011  
add:operating expenses:
variable operating expenses                            $126,500
Fixed operating expenses                                 $49,900
Fixed factory overhead                                       $97,900
Total expenses                                                     $883,311  
income from operations=sales-total expenses
                                         =$1,141,000-$883,311=$257,689
The $257,689 is closest to option A,$257,732 the difference could be due to rounding error