Diego Company manufactures one product that is sold for $80 per unit. The following information pertains to the companys first year of operations in which it produced 40,000 units and sold 35,000 units.

Variable costs per unit:

Manufacturing:

Direct materials $ 24

Direct labour $ 14

Variable manufacturing overhead $ 2

Variable selling and administrative $ 4

Fixed costs per year:

Fixed manufacturing overhead $ 800,000

Fixed selling and administrative expenses $ 496,000 10.

What would have been the companys absorption costing net operating income (loss) if it had produced and sold 35,000 units?