eBook Grainger Company produces only one product and sells that product for $100 per unit. Cost information for the product is as follows: Direct Material Direct Labor Variable Overhead Fixed Overbead $16 per Unit $24 per Unit $6 per Unit $33,500 Selling expenses are $3 per unit and are all variable. Administrative expenses of $15,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. A. Compute net income under 1. Absorption Costing s i. Variable Costing 51.70 X B. Which costing method provide higher net income? By how much? The absorption costing Vmethod provided more net income by 6,700 Feedback Check My W A. Remember that absorption costing includes all costs necessary for production. Conversely, variable costing only uses the variable costs that relate directly to the production pro each assumption. B. Depending on the cost method chosen, there will be differences due to the way fixed costs are treated under each method (absorption and variable),