$4$

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 varlable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.

At this point, Ms$.$ Tyler Is manufacturing only one product$-$a swmsult. Production and cost data relating to the swimsult for the first quarter follow.

$\backslash$table$[[$Units produced,$31,700],[$Units sold,$28,760],[$Variable costs per unit:,$$7\mathrm{.}40$