18) Plasencia Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year:

Beginning inventories:
Finished goods	$	33,000
Estimated total manufacturing overhead at the beginning of the year	$	635,500
Estimated direct labor-hours at the beginning of the year		41,000	direct labor-hours

Results of operations:

Actual direct labor-hours		42,000	direct labor-hours
Manufacturing overhead:
Indirect labor cost	$	177,000
Other manufacturing overhead costs incurred	$	444,000
Selling and administrative:
Selling and administrative salaries	$	280,000
Other selling and administrative expenses	$	310,000
Cost of goods manufactured	$	1,501,000
Sales revenue	$	2,704,000
Cost of goods sold (unadjusted)	$	1,416,000

The net operating income is:

A) $1,318,000

B) $1,008,000

C) $728,000

D) $1,038,000