Variable costing:

Sales 1,500,000
Less variable cost of goods sold:
Beginning inventory (12000Kg × $8) 96,000
Variable cost of goods manufactured (80,000 Kg × $8) 640,000
———
Variable cost of goods available for sale 736,000
Closing inventory (17,000Kg × 8 ) 136,000 600,000
——— ———
Gross contribution margin 900,000
Variable marketing and admin. expenses (75,000Kg × $2) 150,000
———
750,000
Less period costs:
Marketing and administrative 300,000
Manufacturing 320,000 620,000
——— ———
Net operating income 130,000
———