Diego Company manufactures one product that is sold for $$78$ per unit. The following information pertains to the company$$s first year of operations in which it produced $60,000$ units and sold $55,000$ units.

Variable costs per unit:

Manufacturing:

Direct materials $ $28$

Direct labour $ $12$

Variable manufacturing overhead $ $2$

Variable selling and administrative $ $3$

Fixed costs per year:

Fixed manufacturing overhead $ $1,260,000$

Fixed selling and administrative expenses $ $654,000$

$4.$ What is the company$$s net operating income under variable costing?