Problem 6-23 (Algo) Absorption and Variable Costing; Production Constant, Sales Fluctuate [LO6-1, LO6-2, LO6-3) ed Tomi Tyler opened Tom'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 Tani's Creations, Inc. Income Statement For the Quarter Ended March 31 Salen (28,700 units) 51.140,000 Variable expenses Variable cost of goods sold 5.433,370 Variable selling and administrative 198,030 631.400 Contribution margin 576,600 Fixed expenses Fixed manufacturing overhead 253.600 Tixed melling and administrative 275,000 528.600 Net operating loan $ 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 dota relating to the swimsuit for the first quarter follow: 31,700 20,700 Units produced Units sold Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and Administrative $ 7.50 $ 5.70 51.90 56.90 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 foss) figures 3. During the second quarter of operations, the company again produced 31700 units but sold 34,700 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 (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 38 Reg 1A Reg 10 Reg 10 Reg 3A Reg 3C During the second quarter of operations, the company again produced 31,700 units but sold 34,700 units, 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 Variable coating net operating income (loss) Absorption costing net operating income (los)