DeAnne Company produces a single product. The company's variable costing income statement for the month August appears below:

De Anne Company Income Statement For the month ending August 31
Sales ($17 per unit)	$742,900
Variable expenses:
Variable cost of goods sold	393,300
Variable selling expense	131,100
Total variable expenses	524,400
Contribution margin	218,500
Fixed expenses:
Fixed manufacturing	107,040
Fixed selling and administrative	71,360
Total fixed expenses	178,400
Net operating income	$ 40,100

The company produced 35,680 units in August and the beginning inventory consisted of 8,820 units. Variable production costs per unit and total fixed costs have remained constant over the past several months.

Under absorption costing, for August the company would report a:

$16,040 loss

$40,100 profit

$71,360 profit

$16,040 profit