Tami Theler 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 finance. 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 Period Ended March 31

Units Produced 30,000 Units Sold 28,000 Variable cost per unit Direct material $3.50 Direct labor 12.00 Variable manufacturing overhead 1.00 Variable selling and administrative 6.00Sales (28,000 units) $1,120,000 Variable expenses Variable cost of goods sold $462,000 Variable selling and administrative 168,000 630,000 Contribution Margin 490,000 Fixed Cost Fixed Manufacturing Overhead 300,000 Fixed selling and administrative 200,000 500.000 Net operating loss (10,000)