Problem 7-23 (Algo) Absorption and Variable Costing; Production Constant, Sales Fluctuate [L07-1, LO7- 2, LO7-3) Tami Tyler opened Tami's Creations, Incorporated, 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, Incorporated Income Statement For the Quarter Ended March 31 Sales (28,280 units) $ 1,128,000 Variable expenses: Variable cost of goods sold $ 465,300 Variable selling and administrative 197, 400 662,700 Contribution margin 465,300 Fixed expenses: Fixed manufacturing overhead 249,600 Fixed selling and administrative 227,700 477, 300 Net operating loss $ (12,000) Ms. Tyler is discouraged over the loss shown for the Luarter, 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 Units produced 31,200 Units sold 28,200 Variable costs per unit: Direct materials $ 7.10 Direct labor Variable manufacturing overhead $ 1.60 Variable selling and adhinistrative $ 7.00 $ 7.80 Required: 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 31,200 units but sold 34,200 u 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 Reg 1B Reg 10 Req Reg 3B Req 3C Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places.) Unit product cost ROGA Req18 > 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 31,200 units but sold 34,200 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. cos Req 1A Regte Reg 10 Req 3A Reg 3B Req 3C 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, Incorporated Absorption Costing Income Statement Total Net operating income (loss) ts 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 31,200 units but sold 34,200 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 Book Print Complete this question by entering your answers in the tabs below. rences Req 1A Reg 1B Reg 10 Reg 3A Reg 38 Reg 3C 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 Incomos Variable coating net operating Income (loss) Absorption costing net operating income (1038) Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Req 1C Req Reg 38 Reg 3C During the second quarter of operations, the company again produced 31,200 units but sold 34,200 units. What is the company's variable costing net operating income (loss) for the second quarter? Tami's Creations, Incorporated Variable Costing Income Statement Net operating income (loss) c. Reconcile the variable and absorption costing net operating income (loss) figures. 3. During the second quarter of operations, the company again produced 31,200 units but sold 34,200 units. (Assume 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 10 Req Reg 3B Req 3C During the second quarter of operations, the company again produced 31,200 units but sold 34,200 units. What is the company's absorption costing net operating income (loss) for the second quarter? (Round your intermediate calculations to decimal places.) Tami's Creations, Incorporated Absorption Costing Income Statement Total Net operating income (loss) Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Reg 3A Reg 38 Reg 3C During the second quarter of operations, the company again produced 31,200 units but sold 34,200 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 costing net operating income (loss) Absorption costing net operating Income (loss)
