Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations, 100,000 units were produced, and 90,000 units were sold.

Manufacturing costs and selling and administrative expenses for the year were as follows:

Fixed Costs

Variable Costs

Raw materials

$1.75 per unit produced

Direct labor

$1.25 per unit produced

Factory Overhead


$0.50 per unit produced

Selling and administrative


$0.60 per unit sold

What was Indiana Corporation’s net operating income for the year using variable costing?