Triple M Company had the following data for the month:

Variable costs per unit:
Direct materials	$4.00
Directlabour	3.20
Variable overhead	1.00
Variable selling expenses	0.40

Fixed overhead is $4,000 per month, which is applied to production on the basis of normal activity of 2,000 units. During the month, 2,000 units were produced.Loringstarted the month with 300 units in beginning inventory, with unit product cost equal to this months unit product cost. A total of 2,100 units were sold during the month at price of $14 per unit. Selling and administrative expense for the month, all fixed,totalled$3,600. What is the operating income under variable costing?

($540)

$3,540

$3,740

$7,980