Variable vs. Absorption Mickey's Mousetraps, Inc. began business in 2020. Costs related to Mickey's production and sales for its first two years are shown below: 2020 2021 Units produced 10,000 6,000 Direct materials per mousetrap $5 $6 Direct labor per mousetrap $9 $10 Variable manufacturing overhead per mousetrap $3 $4 Fixed manufacturing overhead $100,000 $120,000 Variable selling and administrative expenses per unit sold $1 $2 12 Fixed selling and administrative expenses $20,000 $30,000 13 Selling price per mousetrap $45 $50 14 Units sold 7,000 7,760 15 16 Mickey's uses FIFO to account for its inventory cost flow. 17 How much greater was Mickey's 2021 profit under variable costing than it was under absorption costing? 18 19 20 21 22 23