Problem 6-23 (Algo) Absorption and Variable Costing: Production Constant, Sales Fluctuate (LO6-1, L06-2, LO6-3) 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 Tami's Creations, Inc. Income Statement for the Quarter Ended March 31 Sales (29,000 unita) $1,160,000 Variable expenses: Variable coat of goods sold 5 432.100 Variable selling and administrative 182,700 614.800 Contribution margin 545.200 Tixed expenses Pixed manufacturing overhead 256.000 Fixed selling and administrative 302,200 $57,200 Het operating loss $ 12,000) 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 32,000 29.000 Units produced Units sold Variable costa per uniti Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative 5 7.10 $6.10 $6.30 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 oss 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 32.000 units but sold 35.000 units. (Assume no change in total foved costs) 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. Complete this question by entering your answers in the tabs below. Reg 1A Regin RIC RA RGB R3 Compute the unit product cost under absorption costing (Round your answer to decimal places) Unit productos Reg 18> Reg 1A Reg 1B Req 1C Req Req 38 Rega 3 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 Total Net operating income foss) ( Req 1A Reg 10 > Reg 1A Req 1B Req 1C Req 3A Req 3B Req3C 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 het operating income (oss) Req 1A Reg 1B Req1c Req 3A Req 3B Req 30 During the second quarter of operations, the company again produced 32,000 units but sold 35,000 units. 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) Req 1C Req 38 > Req 1A Req 1B Req 10 Req 3A Reg 38 Req 3C During the second quarter of operations, the company again produced 32,000 units but sold 35,000 units. 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 Total Net operating income (loss) Reg 1A Req 1B Req 1C Req 3A Req 3B Reg 3C During the second quarter of operations, the company again produced 32,000 units but sold 35,000 units. Reconcile the variable casting 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 Variable costing net operating income (ons) Absorption costing net operating income (loss)