Below is a variable costing income statement for Wilner Glass Company, a maker of bottles for the beverage industry. For the coming year, the company is considering hiring two additional sales representatives at $80,000 each for base salary plus 5 percent of their sales for commissions. The company anticipates that each sales representative will generate $900,000 of incremental sales.
Wilner Glass Company
Income Statement
For the Year Ending December 31, 2011
Octavius Company produces a 10-inch chef knife used by commercial chefs. The knives sell for $50 each. In 2011, the company produced 45,000 units and sold 40,000 units. Below are variable and full costing income statements for 2011.
![2316_259-B-M-A-V-C (349).png](https://secure.tutorsglobe.com/CMSImages/2316_259-B-M-A-V-C (349).png)
Required:
Reconcile the difference in profit between the two income statements.