The Ireland Company manufactures and sells a single product. The following costs were incurred during the company's first year of operation:
Variable cost per unit:
Manufacturing:
- Direct materials $22
- Direct Labor $ 5
- Variable manufacturing overhead $ 2
- Variable selling and administrative $ 4
- Fixed costs per year:
- Fixed manufacturing overhead $ 160,000
- Fixed selling and administrative expenses $100,000
During the year, the company produced 24,000 units and sold 23,000 units. The selling price of the company's product is $55 per unit.Compute the company's net operating income for the year under the variable costing method.