In its first year of operations, Kelley Company produced 10,000 units and sold 7,000 units. Its direct materials, direct labor, variable manufacturing overhead, and variable selling and administrative unit costs were $12, $8, $2, and $1 respectively. Its total fixed manufacturing overhead for the year was $50,000. When comparing the company's absorption and variable costing net income statements, which of the following will have a higher net income (and by how much)?

Is it also possible to answer this question without having to conduct an entire income statement?