Problem 7-23 Absorption and Variable Costing; Production Constant, Sales Fluctuate [LO7-1, LO7-2, LO7-3] 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 (28,358 units) Variable expenses: 5 1,134,080 Variable cost of goods sold Variable selling and administrative 467,775 197,832 664,888 469,192 Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative 326,830 166,862 493,692 s 24,508) Net operating loss 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 quarter follow: Units produced Units sold Variable costs per unit: 33, 350 28,350 Direct materials Direct 1abor Variable manufacturing overhead Variable selling and administrative S 7.40 $ 7.50 s 1.60 $ 6.95 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. f operations, the company again produced 33,350 units but sold 38,350 units. (Assume no change in total fixed costs.) o. What is the company's variable costing net operating income (loss) for the second quarter? absorption costing net operating income (loss) for the second quarte costing and absorption costing net operating incomes for the second quarter r? s the compa c. Reconcile the variable Required: . 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 33,350 units but sold 38,350 units. (Assume no 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. Req 1A Req 18 Req 1C Req 3AReq 38 Req 3C During the second quarter of operations, the company again produced 33,350 units but sold 350 units, Assume no change in total fixed costs.) What is the company's variable costing net operating income (loss) for the second quarter? Variable Costing Income S Sales ariable expenses Variable cost of goods sold Variable seling and administrative Fined Flred seiing and administraiva operating income Req 31 > Type here to search 0 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 33,350 units but sold 38,350 units. total fixed costs.) a. What is the company's variable costing net operating income (loss) for the second quarter? What is the company's absorption costing net operating income (loss) for the second quarter? oncile the variable costing and absorption costing net operating incomes for the second quarter Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 3A Req 3B Req 3C During the second quarter of operations, the company again produced total fixed costs.) What is the company's absorption costing net operating income (loss) for the second quarter? (Rou your intermediate calculations to 2 decimal places.) Tami's Creations, Inc. Absorption Costing Income Statement Sales Cost of goods sold Gross margin elling and administrative expenses Net operating income ariable selling and administrative 6.95 ired: mplete the following ompute the unit product cost under absorption costing What is the company's absorption costing net operating income (loss) for the quarter? econcile the variable and absorption costing net operating income (loss) figures During the second quarter of operations, the company again produced 33,350 units but sold 38,350 units tal fixed costs.) What is the company's variable costing net operating income (loss) for the second quarter? What is the company's absorption costing net operating income (loss) for the second quarter? Reconcile the variable costing and absorption costing net operating incomes for the second quarter Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 1C Req 3A Req 38 Req 3C During the second quarter of operations, the company again produced 33,350 units but sold 38,350 units. (Assume no ci in total fixed costs.) Reconcile the variable costing and absorption costing net operating incomes (losses) or the second of Variable Costing and Absorption Costing Net Operating Incomes Vanable costing net operating income joss Less Fuxed manufacturing overthead cost released trom inventory under absorption costing Absorption costing net operating income jss