Exploding Diapers,Inc is a daycare company in Richmond,VA.The company has expanded and now has 3centers.Center 1's Income Statement showed the following:

Revenue$240,000

Direct Expenses195,200

OH50,000

Operating Income(Loss)$(5,200)

The company's overhead for the year included the salary of theowner,Jihyo($90,000),and advertising ($60,000), and was allocated using a peanut-butter spread across all 3centers so that each was allocated $50,000.

Jihyospends her time overseeing the operations of all three centers and handling all paperwork (e.g., billing), and wants to reallocate the existing overhead costs to centers using recently collected information with respect to key activities and activity cost drivers. The estimated activity-based cost and driver data, which in the future will be collected automatically via a new software package using a commercially available product tailored to daycare providers, is presented below:

Total Activity Costs

Allocation base

Account Maintenance(e.g., billing)

$36,000

BASE: Number of preschool children

Meeting with parents

18,000

BASE: Number of parent meetings

Facilities maintenance(calling repairmen, etc.)

22,500

BASE: Maintenance costs

Overseeing operations

13,500

BASE: Spread evenly across centers

Gretchen's total salary

$90,000

Advertising

60,000

BASE: Number of advertising promotions

Activity Consumption by Center

Number of preschool children

Center 1: 48

Center 2: 60

Center 3: 90

Total Activity: 198

Practical Capacity: 225

Number of parent meetings

Center 1: 48

Center 2: 60

Center 3: 350

Total Activity: 458

Practical Capacity: 480

Maintenance costs

Center 1: 5,000

Center 2: 4,000

Center 3: 2,000

Total Activity: 11,000

Practical Capacity: 11,250

Number of advertising promotions

Center 1: 6

Center 2: 6

Center 3: 20

Total Activity: 32

Practical Capacity: 32

Compute the revised operating income for Center 1 using "best practices" under the activity-based-costing method proposed by Jihyo. (ROUND to 2 decimal places in all calculations and enter your answer rounded to the nearest dollar. For example, if you believe the answer is "$25,347.69", enter "$25,348".)