Krepps Corporation produces a single product. Last year, Krepps manufactured 29,650 units and sold 24,600 units. Production costs for the year were as follows:

Direct materials	$222,375
Direct labor	$145,285
Variable manufacturing overhead	$243,130
Fixed manufacturing overhead	$563,350

Sales totaled $1,070,100 for the year, variable selling and administrative expenses totaled $140,220, and fixed selling and administrative expenses totaled $210,515. There was no beginning inventory. Assume that direct labor is a variable cost.

Under variable costing, the company's net operating income for the year would be