EXERCISES$-$SET A

E$7-1$A$.$ Variable and Absorption Costing Chandler Company sells its product for $$100$ per unit. Variable manufacturing costs per unit are $$40,$ and fixed manufacturing costs at the normal operating level of $10,000$ units are $$240,000.$ Variable selling expenses are $$16$ per unit sold. Fixed administrative expenses total $$104,000.$ Chandler had no beginning inventory in Year $1.$ During the year, the company produced $10,000$ units and sold $8,000.$ Would net income for Chandler Company in Year $1$ be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method.