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

Direct materialsPhp153,000Direct labor110,500Variable manufacturing overhead

204,000Fixed manufacturing overhead255,000

Sales were Php780,000 for the year, variable selling and administrative expenses were Php88,400, and fixed selling and administrative expenses were Php170,000. 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

Group of answer choices

Php108,000 higher than under AC

Php108,000 lower than under AC

Php60,000 higher than under AC

Php60,000 lower than under AC