Homework 6 LO7-3] Tami Tyler opened Tamil'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 f quarter was prepared by a friend who has just completed a course in managerial accounting at State University Income Statenent Sales (28,400 unite) Variable expenses 1.136,000 Variable cost of goods sold Variable selling and administrative 445,880 194 540 Contribution nargin rixed expenses rixed anafacturing overhead rixed selling and adminiatrative 323,900 195.850 $19,830 24,250) Net operating loaa Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support fo 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 Onita produced Unita sold 3,400 28.400 7.30 2.00 Variable costs per unit pirect nateriala Variable manufacturing overhead Variable selling and adniniatrative 6.85