Chapter 04 Homework Problems A Steed Help Save & Exit Submit 6 16.7 points Check my work ami iyrer openea iamis Creations, inc., a small manuracturing company, at the beginning of the year. Getting the company througn 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 Tami's Creations, Ine. Income Statement For the Quarter Unded March 31 Sales (28,800 unita) $1,152,000 Variable expenses Variable cost of goods sold $ 483,840 Variable selling and administrative 198,729 6B2,560 Contribution margin 469,440 Fixed expenses: Fixed manufacturing overhead 254,400 Fixed selling and administrative 227.040 481,440 Net operating loss $ 12,000) eBook References 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: 31,800 28,800 Units produced Units sold Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 7.50 $ 7.80 $ 1.50 $ 6.90 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 31,800 units but sold 34,800 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 foss) for the second quarter? c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter