Tami Tyler opened Tami's Creations Inc., a small manufacturing company, at the beginning of the year. Getting the company 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 a state University. 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 would probably have reported 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 25,000 Units sold 22,000 Variable costs per unit: Direct materials $ 7.60 Direct labor $ 2.90 Variable manufacturing overhead $ 1.80 Variable selling and administrative $ 7.85 Complete the following: a Compute the unit product cost under absorption costing. Redo the company's income statement for the quarter using absorption costing. Reconcile the variable and absorption costing net operating income (loss) figures. During the second quarter of operations, the company again produced 25,000 units but sold 28,000 units. (Assume no change in total fixed cost.) a. Prepare a contribution format income statement for the quarter using variable costing. (Round your intermediate calculations to 2 decimal places.) b. Prepare an income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.) c. Reconcile the variable costing and absorption costing net operating income. (Round your intermediate calculations to 2 decimal places.)