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 (11,900 units)	$583,100
Cost of goods sold	339,150
Gross margin	243,950
Selling and administrative expenses:
Fixed	95,200
Variable	59,500
Total selling and administrative expense	154,700
Net operating income	$ 89,250

The company's variable production costs are $20.50 per unit and its fixed manufacturing overhead totals $105,800 per month.

Net operating income under the variable costing method for July would be:

A. $75,450

B. $99,850

C. $78,650

D. $89,250