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 Tani's Creations, Inc. Income Statement Tor the Quarter inded March 31 Sales (28,400 units) $1,136,000 Variable expenses Variable cost of goods sold $ 423. 160 Variable selling and administrative 195,960 619,120 Contribution margin Pixed expenses Yixed manufacturing overhead 251.200 Fixed selling and administrative 277,680 528,880 Net operating loss $ 12,000) oces 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- swimsuit Production and cost data relating to the swimsuit for the first quarter follow 33.400 28,400 tinits produced Units sold Variable conta per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 7.20 $ 5.70 $ 2.00 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 31,400 units but sold 34,400 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 foss) 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 Req 1C Req Req 3B Req 3C Compute the unit product cost under absorption costing. (Round your answer to 2 decimal Unit product cost og 1A Reg 1B > Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Reg 10 Reg Req 38 Reg 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, Inc. Absorption Costing Income Statement Total Net operating income (05) Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 10 Reg 3A Req3B Reg 30 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 Incomes Variable costing net operating income (los) Absorption costing net operating income (loss) During the second quarter of operations, the company again produced 31,400 units but sold 34,400 units. What is the company's variable costing net operating income (loss) for the second quarter? Tami's Creations, Inc. Variable Costing Income Statement 0 0 0 Net operating income (loss) Reg 1C Ron 11 Reg 1A Reg 1B Req 10 Req Req 3B Req 3C During the second quarter of operations, the company again produced 31,400 units but sold 34,400 units. What is the company's absorption costing net operating income (loss) for the second quarter? (Round your intermediate calculations to 2 decimal places.) Tami's Creations, Inc. Absorption Costing Income Statement Total 0 Net operating income (loss) During the second quarter of operations, the company again produced 31,400 units but sold 34,400 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 conting net operating income (ons) Absorption costing net operating income (loss) ( Req 3B
