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Reeses Tot Toy Boxes uses variable costing to manage its internal operations. The following data...

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Accounting

Reeses Tot Toy Boxes uses variable costing to manage its internal operations. The following data relate to the companys first year of operation, when 5,000 units were produced and 4,200 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 $100,000 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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