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Absorption vs. variable costing Reeses Tot Toy Boxes uses variable costing to manage its internal...

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Accounting

Absorption vs. variable costing Reeses Tot Toy Boxes uses variable costing to manage its internal operations. The following data relate to the companys first year of operation, when 15,000 units were produced and 12,600 units were sold.

Variable Costs Per Unit
Direct material $50.00
Direct labor 30.00
Variable overhead 14.00
Variable selling costs 12.00
Total Fixed Costs
Selling and administrative $1,500,000
Manufacturing $300,000

How much higher (or lower) would the companys first-year net income have been if absorption costing had been used rather than variable costing?

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