$ 1,144,000 Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28, 600 units) Variable expenses: Variable cost of goods sold $ 431,860 Variable selling and administrative 194,480 Contribution margin Fixed expenses: Fixed manufacturing overhead 252,800 Fixed selling and administrative 276,860 Net operating loss 626,340 517,660 Req 1A Req 1B Req 1C Req 3A Req 3B Req 3C 529,660 12,000) $ During the second quarter of operations, the company again produced 31,600 units but sold 34,600 units. What is the company's variable costing net operating income (loss) for the second quarter? Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter. Tami's Creations, Inc. Variable Costing Income Statement Sales 1,200,000 At this point, Ms. Tyler is manufacturing only one product-a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: Variable expenses: Indirect materials 31,600 28,600 Units produced Units sold Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Indirect labor Variable cost of goods sold Variable selling and administrative 22,200 X 18,600 X 4,500 20,400 $ 7.40 $ 6.20 $ 1.50 $ 6.80 65,700 1,134,300 Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative 252,800 276,860 529,660 $ 604,640 Net operating income (loss) Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. b. What is the company's absorption costing net operating income (loss) for the quarter? c. Reconcile the variable and absorption costing net operating income (loss) figures. 3. During the second quarter of operations, the company again produced 31,600 units but sold 34,600 units. (Assume no change in total fixed costs.) a. What is the company's variable costing net operating income (loss) for the second quarter? b. What is the company's absorption costing net operating income (loss) for the second quarter? c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter