Krepps Corporation produces a single product. Last year, Krepps manufactured 32,210 units and sold 26,700 units. Production costs for the year were…

Krepps Corporation produces a single product. Last year, Krepps manufactured 32,210 units and sold 26,700 units. Production costs for the year were as follows:

  Direct materials$241,575Direct labor$157,829Variable manufacturing overhead$251,238Fixed manufacturing overhead$418,730

Sales totaled $1,241,550 for the year, variable selling and administrative expenses totaled $138,840, and fixed selling and administrative expenses totaled $199,702. There was no beginning inventory. Assume that direct labor is a variable cost.

Under variable costing, the company’s net operating income for the year would be:

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