Krepps Corporation produces a single product. Last year, Krepps manufactured 27,970 units and sold 22,200 units. Production costs for the year were as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $ 234,948 $ 131,459 $ 240,542 $335,640 Sales totaled $1,043,400 for the year, variable selling and administrative expenses totaled $113,220, and fixed selling and administrative expenses totaled $198,587. 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: Multiple Choice $34,043 lower than under absorption costing. $34,043 higher than under absorption costing. $69,240 lower than under absorption costing. $69,240 higher than under absorption costing