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Managerial Accounting

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Universal Inc Absorption vs Variable Profit Differences

MGRACT-3I16ID

Universal Inc. produces and sells briefcases for \$45 each. In the first year of operations, 42,000 units were produced and 40,000 were sold. The cost per unit showed:

Cost for first year of operations:
Direct materials \$4.00 per unit
Direct labor \$5.00 per unit
Variable manufacturing costs \$1.20 per unit
Sales commissions \$0.50 per unit
Fixed manufacturing costs \$25,200
Administrative expenses (all fixed) \$54,600

What is the difference in the operating profits under absorption versus variable costing methods?

Enter your response as a whole number, without commas or dollar sign. For instance, enter 4505 rather than \$4,505.