chater 7 question 6
Tami Tyler opened Tami's Creations, Inc, 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 $1,140,000 Tami's Creations. The Incone Statement For the Quarter Ended March 31 Sales (28,500 units) Variable expenses Variable cost of goods sold $490,200 Variable selling and administrative 193,800 Contribution margin Fixed expenses: Fixed manufacturing overhead 301.500 Fixed selling and administrative 177.000 Het operating loss 684,000 456,000 478,500 $ ( 22,500) 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 33,500 28,500 Units produced Units sold Variable costs per unit Oirect materials Direct labor Variable manufacturing overhead Variable selling and administrative $7.10 $ 0.00 $ 1.90 $ 0.00 Usung het operating income (loss) for the second quarter? c. Reconcile the variable costing and absorption costing net operating Incomes for the second quarter Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 10 Req 3A Req 3B Reg 30 Compute the unit product cost under absorption costing (Round your answer to 2 decimal places Unit product cost Rega Reg 1B > Complete this question by entering your answers in the tabs below. Req 1A Reg 13 Reg 1C Reg 3A Reg 3B Req 30 What is the company's absorption costing net operating income (loss) for the quarter? (Round your intermediate calculations to 2 decimal places.) Tami's Creations, Inc. Absorption Costing Income Statement Net operating income (oss) c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 1C Reg 3A Req 3B Req 30 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) Absorption costing net operating income (loss) (Reg 1B Reg 3A > Reg 1A Reg 1B Reg 1C Reg 3A Reg 3B Reg 30 During the second quarter of operations, the company again produced 33,500 units but sold 38,500 units. (Assume no change in total fixed costs.) What is the company's variable costing net operating Income (loss) for the second quarter? Tami's Creations, Inc. Variable Costing Income Statement Net operating income (loss) Req1A Reg 1B Reg 10 Reg 3A Reg 3B Reg 3C During the second quarter of operations, the company again produced 33,500 units but sold 38,500 units. (Assume no change In total fixed costs.) What is the company's absorption costing net operating income (loss) for the second quarter? (Round your intermediate calculations to 2 decimal places) Tami's Creations, Inc. Absorption Costing Income Statement Not operating income (los) Complete this question by entering your answers in the tabs below. Req IA Req 18 Req 1C Reg 3A Reg 3B Req3C During the second quarter of operations, the company again produced 33,500 units but sold 38,500 units. (Assume no change in total fixed costs) Reconcile the variable costing and absorption costing net operating incomes (losses) for the second quarter. (Losses and deductions should be entered as a negative) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variablo costing net operating income (loss) Absorption costing net operating income (oss)
