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. 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. Income Statement Sales (28,600 units) Variable expenses 1,144,000 Variable cost of goods sold Variable selling and administrative 197,340 483,340 680,680 463,320 Contribution margin Fixed expenses: Pixed manufacturing overhead Fixed selling and administrative 281,240 195,430 476,670 13,350) Net operating loss 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 Units produced Units sold Variable costs per unit: 31,600 28,600 Prey 5 of 12Next>