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. $1,124,000 Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,100 units) Variable expenses: Variable cost of goods sold $ 410,260 Variable selling and administrative 193, 890 Contribution margin Fixed expenses: Fixed manufacturing overhead 264,800 Fixed selling and administrative 275,050 Net operating loss 604,150 519,850 539,850 $( 20,000) 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: 33,100 28,100 Units produced Units sold Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 7.20 $ 5.60 $ 1.80 $ 6.90 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 (loss) figures. 3. During the second quarter of operations, the company again produced 33,100 units but sold 38,100 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. Req 1A Req 1B Req 1C Req 3A Req 3B Req 3C I Reg 1A Regia | Req 18 Req 1B Req 10 Regic Req Req 3A Req 3B Req3B Req3C Req 3C Compute the unit product cost under absorption costing. (Round your answer to 2 decimal Unit product cost Req 1A Reg 1B Req 1C Req Req 3B Req 3C What is the company's absorption costing net operating income (loss) for the quarter? (Ro to 2 decimal places.) Tami's Creations, Inc. Absorption Costing Income Statement Net operating income (loss) Req 1A Reg 1B Req 1C Req Req 3B Req 3C Reconcile the variable and absorption costing net operating income (loss) figures. (Losses 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) During the second quarter of operations, the company again produced 33,100 units but sol change in total fixed costs.) What is the company's variable costing net operating income Tami's Creations, Inc. Variable Costing Income Statement Net operating income (loss) Req 1A Reg 1B Req 1C Req Req 3B Reg 381 During the second quarter of operations, the company again produced 33,1 change in total fixed costs.) What is the company's absorption costing net o (Round your intermediate calculations to 2 decimal places.) Tami's Creations, Inc. Absorption Costing Income Statement Net operating income (loss) Req 1A Req 1B Req 1C Req 3A Req 3B Req 3C During the second quarter of operations, the company again produced 33,100 units but so change in total fixed costs.) Reconcile the variable costing and absorption costing net oper 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 (loss) Absorption costing net operating income (loss)