Carr Company produces a single product. Last year, Carr manufactured 33,930 units and sold 28,300 units. Production costs for the year were as follows: Fixed manufacturing overhead $542,880 Variable manufacturing overhead $288,405 Direct labor $145,899 Direct materials $288,405 Sales were $1,287,650, for the year, variable selling and administrative expenses were $164,140, and fixed selling and administrative expenses were $206,973. 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) $27,587 lower than under absorption costing

b) $27,587 higher than under absorption costing

c) $90,080 lower than under absorption costing

d) $90,080 higher than under absorption costing