Tami Tyler opened Tamis 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. Tylers 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.

Tamis Creations, Inc.

Income Statement

For the Quarter Ended March 31

Sales (28,350 units) $ 1,134,000

Variable expenses:

Variable cost of goods sold $ 464,940

Variable selling and administrative 192,780 657,720

Contribution margin 476,280

Fixed expenses:

Fixed manufacturing overhead 300,150

Fixed selling and administrative 198,630 498,780

Net operating loss $ ( 22,500)

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 producta swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:

Units produced 33,350

Units sold 28,350

Variable costs per unit:

Direct materials $ 7.60

Direct labor $ 7.20

Variable manufacturing overhead $ 1.60

Variable selling and administrative $ 6.80

3. During the second quarter of operations, the company again produced 33,350 units but sold 38,350 units. (Assume no change in total fixed costs.)

a. What is the companys variable costing net operating income (loss) for the second quarter?

b. What is the companys 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.

Taeni 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 That's Creations, Inc. Income Statement Sales (26,350 units) For the carter Ended March 31 5 1.136.000 Variable expenses Variable cost of Boods sold $164.94 Variable selling and dinistrative 192,73 657.720 Contribution in 476,288 Fixed expenses Fixed snufacturing overhead 300,150 Fixed selling and dinistrative 1983 498,280 Net operating loss 5 ( 22.500 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-a swimsuit Production and cost data relating to the swimsuit for the first quarter follow uits produced Units sole Variable costs per unit Direct materials Direct tober Variable manufacturing overhead Vart selling and strative $ 7.60 $7:30 51.0 Reg 1A Reg 1B Reg 1 Req Reg 3B Reg 30 During the second quarter of operations, the company again produced 33,350 units but sold 38,350 units. (Assume no change In total fixed costs.) What is the company's variable costing net operating income (loss) for the second quarter? Tomis Croations, Inc Variable Costing Income Statement Sales Variable expenses Variable cost of goods sold Variable selling and administrative 0 0 Contribution margin Fixed expenses Fixed manufacturing overhead Fixed selling and administrative Net operating income (los) RIA Reg 1B Reg 1 Reg 3A Reg 38 Reg 3C During the second quarter of operations, the company again produced 33,350 units but sold 38,350 units. (Assume no change In total fixed costs) 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 Almorption Corting Income Statement Net operating income (o) Reg 1A Reg 1B Req IC Red 3A Reg 3B Reg 3C During the second quarter of operations, the company again produced 33,350 units but sold 38,350 units. (Assume no change In total fixed costs) 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 A Variabile costing net operating income (loss) Absorption costing niet operating income (lon)