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 (13,400 units)	$696,800
Cost of goods sold	462,300
Gross margin	234,500
Selling and administrative expenses:
Fixed	134,000
Variable	80,400
Total selling and administrative expense	214,400
Net operating income	$ 20,100

The company's variable production costs are $26.50 per unit and its fixed manufacturing overhead totals $115,200 per month.

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

$20,100

$12,100

$28,100

$8,900