Leheny Corporation manufactures and sells one product. The following information pertains to the company$$s first year of operations:

Variable costs per unit:

Direct materials $ $85$

Fixed costs per year:

Direct labor $ $1,155,000$

Fixed manufacturing overhead $ $3,190,000$

Fixed selling and administrative expenses $ $2,300,000$

The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced $55,000$ units and sold $50,000$ units. The company$$s only product is sold for $$238$ per unit.

Assume that the company uses an absorption costing system that assigns $$21$ of direct labor cost and $$58$ of fixed manufacturing overhead to each unit that is produced. The net operating income under this costing system is:

Multiple Choice

$$580,000$

$$1,400,000$

$$1,005,000$

$$1,110,000$