Octavius Company produces a 10-inch chef knife used by commercial chefs. The knives sell for $58 each. In 2014, the company produced 49,000 units and sold 43,700 units. There was no beginning inventory. Following are variable and full costing income statements for 2014.

Income Statement Prepared Using Variable Costing Octavius Company Income Statement For the Year Ending December 31, 2014 Sales $2,534,600 Less variable costs: Variable cost of goods sold $651,000 $799,000 Variable selling expense 148,000 Contribution margin 1,735,600 Less fixed costs: Fixed manufacturing expense 524,300 Fixed selling expense 156,100 Fixed administrative expense 104,000 784,400 Net income $951,200

Income Statement Prepared Using Full Costing Octavius Company Income Statement For the Year Ending December 31, 2014 Sales $2,534,600 Less cost of goods sold 1,118,590 Gross margin 1,416,010 Less selling and administrative expenses: Selling expense $304,100 Administrative expense 104,000 408,100

Net income $1,007,910

Reconcile the difference in profit between the two income statements. (Round cost per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g.125.)

Reconciliation Statement Net income under variable costing $ ______________ : _________________ $ Net income under full costing $