The following information is available for Skipper Pools, a manufacturer of aboveground swimming pool kits:

In its first year of operation, the company produced 12,000 units but was able to sell only 10,000 units. In its second year, the company needed to get rid of excess inventory (the extra 2,000 units produced but not sold in 2017), so it cut back production to 8,000 units.
Required
a. Calculate profit for both years using full costing.
b. Note that profit has declined in 2018. Is company performance actually worse in 2018 compared to 2017?
c. Calculate profit for both years using variable costing.
d. Does variable costing profit present a more realistic view of firm performance in the 2 years? Explain.

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2017 2018 Total Units produced 8,000 12,000 20,000 Units sold 10,000 10,000 20,000 Selling price per unit Direct material per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead 4,000 4,000 800 2$ 800 1,500 1,500 2$ 300 300 $2,400,000 $2,400,000 per year Fixed selling and administrative $1,500,000 $1,500,000 expense per year