Miller Heating is a small manufacturer of auxiliary heaters. The units sell for $300 each. In 2017, the company produced 1,000 units and sold 800 units. There was no beginning inventory. Below are variable and full costing income statements for 2017.

Required
Reconcile the difference in profit between the two income statements.

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Income Statement Prepared Using Variable Costing Miller Heating Company Income Statement For the Year Ending December 31, 2017 Sales $240,000 Less variable costs: Variable cost of goods sold Variable selling expense Contribution margin $32,000 16,000 48,000 192,000 Less fixed costs: Fixed manufacturing expense Fixed selling expense Fixed administrative expense 50,000 20,000 30,000 100,000 $ 92,000 Net income Income Statement Prepared Using Full Costing Miller Heating Company Income Statement For the Year Ending December 31, 2017 Sales $240,000 Less cost of goods sold 72,000 168,000 Gross margin Less selling and administrative expenses: Selling expense Administrative expense $36,000 30,000 66,000 Net income $102,000