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 Tam Creations, Inc. Income Statement For the Quarter Unded March 31 Sales (28,560 units) $1,140,000 Variable expenses Variable cost of goods sold 5 424,550 Variable selling and administrative 196.650 621 300 Contribution margin 518,700 Tixed expenses Pixed manufacturing overhand 283,500 Pixed selling and administrative 248.700 532,200 Het operating Soon $ 13,500) Ms. Tyler is discouraged over the own 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--s swimsuit Production and cost data relating to the swimsuit for the first quarter follow Units produced Units sold Variable costs per unit 31,500 20, 500 Check my we 31,500 28.500 Units produced Units sold Variable costa per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 7.20 $ 5.90 $ 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 foss) 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 31,500 units but sold 34,500 units. (Assume no change in total fixed costs.) a. What is the company's variable costing net operating income foss) 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. Reg 1A Reg 16 Reg 10 Reg DA Reg 38 Reg 3C Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places) Req A Reg 1B Req 1C Req Reg 38 Reg 30 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 Gloss) Complete this question by entering your answers in the tabs below. Req IA Reg 1B Req 1C 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 Incomes Variable conting net operating income (los) Absorption costing net operating income (los) Red IA Reg 18 Req 1C Reg Req 3B Reg 3C During the second quarter of operations, the company again produced 31,500 units but sold 34,500 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 (105) Req IA Reg 1B Reg 10 Reg Reg 38 Reg 3C During the second quarter of operations, the company again produced 31,500 units but sold 34,500 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) 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. Reg 1A Reg 18 Reg 1C Req3A Reg 38 Reg 3C During the second quarter of operations, the company again produced 31,500 units but sold 34,500 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 (los) Absorption costing net operating income (loss)
