Sony manufacturers the Walkman, a mobile tape player that provides "a new way to enjoy music in high quality anywhere at any time." Sony uses a job order costing system and allocates actual manufacturing overhead to production.

The following information was provided by the company for the year ended December 31, 1985:

Beginning Raw Materials Inventory$375,000Ending Raw Materials Inventory$435,000Direct Factory Labor$185,000Indirect Factory Labor$35,000Indirect Materials$15,000Building Utilities*$44,000Selling, General, and Administrative Expenses$125,000Building Depreciation*$300,000

*70% of the building is devoted to production; 30% of the building is devoted to selling and administrative functions.

In addition to the above information, $531,000 raw materials were purchased during the period. Sony's beginning and ending Work in Process inventories were $245,000 and $290,000, respectively. The net decrease in the Company's finished goods inventories during the period was $25,000. Raw materials contains both direct and indirect materials.

Calculate Operating Income assuming a sales level of $1,500,000.