Kristi Bostock started Bostock Boutique three years ago. Her business has grown handsomely and she now produces and sells thousands of items each year. Selected operational and financial data are shown below:
Units in beginning inventory ....... 0
Units produced ............ 20,000
Units sold ...............19,000
Selling price per unit ..........$ 100
Variable costs per unit:
Direct materials .............$ 12.00
Direct labor ..............25.00
Manufacturing overhead ......... 3.00
Selling and administrative ..........2.00
Fixed costs in total:
Manufacturing overhead .......$500,000
Selling and administrative ...... $600,000

Required
Calculate Bostock Boutique’s net income, assuming that the company uses variable costing.