Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: raw materials $79,000, work in process $25,600, finished goods $37,200. The company applies overhead cost to jobs using direct labor-hours. For this year, the company's predetermined overhead rate of $12.25 per direct labor-hour was based on a cost formula that estimated $490,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded this year: raw materials were purchased on account, $690,000. Raw materials used in production, $660,000. All of the raw materials were used as direct materials. The following costs were accrued for employee services: direct labor, $440,000; indirect labor, $150,000; selling and administrative salaries, $260,000. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $462,000. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $340,000. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. Jobs costing $1,542,950 to manufacture according to their job cost sheets were completed during the year. Jobs were sold on account to customers during the year for a total of $3,172,500. The jobs cost $1,552,950 to manufacture according to their job cost sheets. What is the net operating income for this year?
a) $209,950
b) $209,000
c) $199,950
d) $199,000