Kilihea Corporation produces a single product. The company's absorption costing income statement for July follows: Kilihea Corporation Income Statement For the month ended July 31 Sales (14,000 units) $686,000 Cost of goods sold 428,400 Gross margin 257,600 Selling and administrative expenses: Fixed 126,000 Variable 70,000 Total selling and administrative expense 196,000 Net operating income $ 61,600 The company's variable production costs are $21.60 per unit and its fixed manufacturing overhead totals $132,100 per month. Net operating income under the variable costing method for July would be: