Question
Vaughan Company sells its product for $80 per unit. During 2020, it produced 7,000 units and sold 5,000 units (there was no beginning inventory). During
Vaughan Company sells its product for $80 per unit. During 2020, it produced 7,000 units and sold 5,000 units (there was no beginning inventory). During 2021, it produced 6,000 units and sold 8,000 units
Over the 2 years, costs were stable:
Direct Materials per unit $ 20
Direct Labor per unit is $ 10
Variable Factory Overhead per unit $ 8
Variable Selling & Administrative per unit $ 4
Fixed Factory Overhead $ 126,000
Fixed Selling & Administrative $ 50,000
Vaughan uses variable costing. Net Income in Year 2 is $__________ higher than net income in Year 1.
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