Example $12.$ Variable Costing vs$.$ Absorption Costing

Question: Regal Corporation produces a product with the following costs: Direct materials $$20$ per unit, direct labor $$15$ per unit, variable overhead $$10$ per unit, and fixed overhead $$100,000$ per year. The company produced $10,000$ units and sold $8,000$ units during the year. Calculate the net operating income under both variable costing and absorption costing. Provide detailed calculations and explain the differences in the results.