harris company produces a single product last year harris manufactured 17 000 u cont 459644

Harris Company produces a single product. Last year, Harris manufactured 17,000 units and sold 13,000 units. Production costs for the year were as follows:

Production Cost Data

Direct materials $153,000

Direct labor $110,500

Variable manufacturing overhead $204,000

Fixed manufacturing overhead

$255,000

Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and fixed selling and administrative expenses were $170,000. There was no beginning inventory. Assume that direct labor is a variable cost.

Under variable costing, the company’s net operating income for the year would be _______ than under absorption costing.

A. $60,000 higher

B. $108,000 higher

C. $108,000 lower

D. $60,000 lower

***Please SHOW HOW to get the answer***