Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5 2 Door Print ofereces Tami Tyler opened Tom's Creations, Incorporated, a small manufacturing company, at the beginning of the year. Getting the company through

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
5 2 Door Print ofereces Tami Tyler opened Tom's Creations, Incorporated, a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University Tania Creations, Incorporated Income Statement For the Quarter Ended March 31 Sale (20,700 unita) 5 1.140,000 Variable expenses Variable cost of goods sold 5 433,370 Variable selling and administrative 175,070 608,440 Contribution margin 539,560 Fixed expensesi Fixed manufacturing overhead 285,300 Fixed selling and administrative 267.760 553,060 Net operating loss $13.500) 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. 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: 31,700 28,700 Units produced Units wold Variable costs per unit Direct materiala Direct labor Variable manufacturing overhead Variable selling and administrative 5 7.10 $6.40 $ 1.60 $ 6.10 ww Check my Variable selling and administrative $ 6.10 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 foss) figures. 3. During the second quarter of operations, the company again produced 31,700 units but sold 34,700 units. (Assume no change in total fixed costs.) a. What is the company's variable costing net operating income (oss) 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, Hook rences Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 14 Red 3A Reg 38 Reg 3C Reconcile the variable and absorption costing net operating income (loss) figures. (Losses and deductions should be entered as a negative.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income (loss) Less: Foxed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing net operating income (loss) 5 Complete this question by entering your answers in the tabs below. Req1A Reg 1B Reg 10 Reg 3A Req 38 Reg 3C During the second quarter of operations, the company again produced 31,700 units but sold 34,700 units. What is the company's variable costing net operating income (loss) for the second quarter? Tami's Creations, Incorporated Variable Costing Income Statement Sales Book Print rences Variable expenses Variable cost of goods sold Variable selling and administrative + + 0 0 Contribution margin Fixed expenses Fixed manufacturing overhead Fixed selling and administrative 0 Net operating income (loss) Ch. 6 Homework Seved Help 5 Complete this question by entering your answers in the tabs below. 2 points Reg 1A Reg 18 Reg 1C Reg 3A Reg 38 Reg 3C During the second quarter of operations, the company again produced 31,700 units but sold 34,700 units. What is the company's absorption costing net operating income (loss) for the second quarter? (Round your intermediate calculations to 2 decimal places.) Book Print References Tami's Creations, Incorporated Absorption Costing Income Statement Total 0 Net operating income foss) Check my won 5 a What is the company's variable costing net operating income foss) for the second quarter? b. What is the company's absorption costing net operating income foss) for the second quarter? c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter. 2 Complete this question by entering your answers in the tabs below. RIA Red 10 Hea Hea Bee Rec During the second quarter of operations, the company again produced 31,700 units but sold 34,700 units Reconcile the variable costing and absorption costing net operating incomes (losses) for the second quarter comes and deduction should be entered as a negative) Reconciliation of variabile Costing and Absorption Gosling Net Operating Incomes Variable coating net operating income (or Deduct Feed manufacturing overhead cost defense in inventory under absorption costing Absorption costing operating income Reg 38

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield

15th edition

978-1118159644, 9781118562185, 1118159640, 1118147294, 978-1118147290

More Books

Students also viewed these Accounting questions

Question

(b) Lower and upper control limits for the R chart.

Answered: 1 week ago