Farrow Co. expects to sell 400,000 units of its product in the next period with the following results.

Sales (400,000 units) $ 6,000,000

Costs and expenses

Direct materials 800,000

Direct labor 1,600,000

Overhead 400,000

Selling expenses 600,000

Administrative expenses 1,028,000

Total costs and expenses 4,428,000

Net income $ 1,572,000

The company has an opportunity to sell 40,000 additional units at $13 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 15% and (2) administrative expenses would increase by $172,000. Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit.

	Normal Volume	Additional Volume	Combined Total
Sales	$6,000,000	$520,000	6,520,000
Costs and expenses:
Direct materials	800,000	80,000	880,000
Direct labor	1,600,000	160,000	1,760,000
Overhead	400,000	?	446,000
Selling expenses	600,000	?	660,000
Administrative expenses	1,028,000	?	2,228,000
Total costs and expenses	4,428,000	1,546,000	5,974,000
Incremental income (loss) from new business	$1,572,000	$(1,026,000)	546,000