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 (28,000 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 expenses:
Fixed manufacturing overhead		300,000
Fixed selling and administrative		200,000			500,000
Net operating loss				$	(10,000	)

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	30,000
Units sold	28,000
Variable costs per unit:
Direct materials		$	3.50
Direct labor		$	12.00
Variable manufacturing overhead		$	1.00
Variable selling and administrative		$	6.00

During the second quarter of operations, the company again produced 30,000 units but sold 32,000 units. What is the company's variable costing net operating income (loss) for the second quarter? Tami's Creations, Inc Variable Costing Income Statement Sales $ 1,280,000 ariable expenses $192,000 Variable selling and administrative Variable cost of goods sold es 192,000 Contribution margin 1,088,000 ixed expenses Fixed manufacturing overhead Fixed selling and administrative 300,000 200,000 500,000 Net operating income $ 588,000 KReq 10 Req 3B