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 (23,000 units)			$	834,900
Variable expenses:
Variable cost of goods sold	$	273,700
Variable selling and administrative		178,250		451,950
Contribution margin				382,950
Fixed expenses:
Fixed manufacturing overhead		221,000
Fixed selling and administrative		216,000		437,000
Net operating loss			$	( 54,050)

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 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:

Units produced		26,000
Units sold		23,000
Variable costs per unit:
Direct materials	$	7.10
Direct labor	$	2.80
Variable manufacturing overhead	$	2.00
Variable selling and administrative	$	7.75

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. Tyler's personal finances. The folloing income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University Tami's Creations, Inc Income Statement For the Quarter Ended March 31 $ 834,900 Sales (23,000 units) Variable expenses Variable cost of goods sold Variable selling and administrative $273,700 178,250 451,950 382,950 Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative 221,000 216,000 437,000 Net operating loss $ (54,050) 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 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 Units produced Units sold 26,000 23,000 Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 7.10 $ 2.80 $ 2.00 $ 7.75 Required 1. Complete the following: a. Compute the unit product cost under absorption costing. (Round your intermediate and final answers to 2 decimal places.) it product cost