Variable and Absorption Costing Grant Company sells its product for $50 per unit. Variable manu-

facturing costs per unit are $30, and fixed manufacturing costs at the normal operating level of 18,000

units are $90,000. Variable selling expenses are $4 per unit sold. Fixed administrative expenses total

$155,000. Grant had 7,000 units at a per-unit cost of $35 in beginning inventory in 2016. During

2016, the company produced 18,000 units and sold 20,000. Would net income for Grant Company in

2016 be higher if calculated using variable costing or using absorption costing? Calculate reported

income using each method.