Krepps Corporation produces a single product. Last year, Krepps manufactured 34,930 units and sold 29,900 units. Production costs for the year were as follows: Direct materials $ 265,468 Direct labor $ 171,157 Variable manufacturing overhead $ 300,398 Fixed manufacturing overhead $ 454,090

Sales totaled $1,330,550 for the year, variable selling and administrative expenses totaled $170,430, and fixed selling and administrative expenses totaled $261,975. 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:

A) 65390 higher than under absorption costing

B) 65390 lower than under absorption costing

C) 31,689 lower than under absorption costing

D) 31689 higher than under absorption costing.