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Tami Theler opened Tami's Creations: Inc.: a small manufacturing company at the beginning of the year. Getting the company through its rst quarter of operations placed a considerable strain on Ms Tyler's personal nance, 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. Tami's Creations, Inc. Income statement For the Period Ended March 31 Sales (28,000 units) $1,120,000 Variable expenses Variable cost of goods sold $462,000 Variable selling and administrative 1681000 630030 Contribution Margin 490,000 Fixed Cost Fixed Manufacturing Overhead 300,000 Fixed selling and administrative 200,000 500,000 Net operating loss (10,000) Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for bank loan. Another friend, a CPA: insists that the company should be using absorption costing rather than variable costing and argues that it absorption costing had been used the company would probably have reported at least some prot for the quarter. WK3,PALManag....docx A At this point, Ms. Tyler is manufacturing only one product, a swimsuit. Production and cost data relating to the swimsuit for the first quarter follows: Units Produced 30,000 Units Sold 28,000 Variable cost per unit Direct material $3.50 Direct labor 12.00 Variable manufacturing overhead 1.00 Variable selling and administrative 6.00Required: 1. Compute the following 1. Compute the unit product cost under absorption costing 2. Redo the company's income statement for the quarter using absorption costing 3. Reconcile the variable and absorption costing net operating income figures 2. Was the CPA correct in suggesting that the company really earned a "profit" for the quarter? Explain 3. During the second quarter of operations, the company again produced 30,000 units but sold 32,000 units(Assume no change in total fixed cost) 1. Prepare contribution format income statement for the quarter using variable costing 2. Prepare an income statement for the quarter using absorption costing 3. Reconcile the variable costing and absorption costing net operating incomes. *Please refer to the Grading Criteria for Professional Assignments in the University Policies for specific guidelines and expectations. Refresh Submissions A Submission Title Turnitin Paper ID Submitted Similarity Grade