Miller Heating Company is a small manufacturer of auxiliary heaters. The units sell for \(\$ 100\) each. In 2008 , the company produced 1,200 units and sold 1,000 units. Below are variable and full costing income statements for 2008.

Required
Reconcile the difference in profit between the two income statements.

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Income Statement Prepared Using Variable Costing Miller Heating Company Income Statement For the Year Ending December 31, 2008 Sales $100,000 Less variable costs: Variable cost of goods sold $20,000 Variable selling expense 10,000 30,000 Contribution margin 70,000 Less fixed costs: Fixed manufacturing expense 24,000 Fixed selling expense 8,000 Fixed administrative expense 12,000 44,000 Net income $ 26,000 Income Statement Prepared Using Full Costing Miller Heating Company Income Statement For the Year Ending December 31, 2008 Sales $100,000 Less cost of goods sold 40,000 Gross margin 60,000 Less selling and administrative expenses: Selling expense $18,000 Administrative expense 12,000 30,000 Net income $ 30,000