Tami Tyler opened Tami's Creations, Incorporated, 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. Sales (29,000 units) Variable expenses: Tami's Creations, Incorporated Income Statement For the Quarter Ended March 31 Variable cost of goods sold Variable selling and administrative Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Net operating loss $ 1,160,000 $ 446,600 191,400 638,000 522,000 288,000 247,500 535,500 $ (13,500) 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 Units sold Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. 32,000 29,000 $ 7.40 $ 6.30 $ 1.70 $ 6.60 b. What is the company's absorption costing net operating income (loss) for the quarter? c. Reconcile the variable and absorption costing net operating income (loss) figures. 3. During the second quarter of operations, the company again produced 32,000 units but sold 35,000 units. (Assume no change in total fixed costs.) a. What is the company's variable costing net operating income (loss) for the second quarter? b. What is the company's absorption costing net operating income (loss) for the second quarter? c. Reconcile the variable costing and absorption costing net operating incomes (losses) for the second quarter. Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. b. What is the company's absorption costing net operating income (loss) for the quarter? c. Reconcile the variable and absorption costing net operating income (loss) figures. 3. During the second quarter of operations, the company again produced 32,000 units but sold 35,000 units. (Assume no change in total fixed costs.) a. What is the company's variable costing net operating income (loss) for the second quarter? b. What is the company's absorption costing net operating income (loss) for the second quarter? c. Reconcile the variable costing and absorption costing net operating incomes (losses) for the second quarter. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 3A Req 3B Req 3C Compute the unit product cost under absorption costing. (Round your answer to 2 decimal places.) Unit product cost Req 1A Req 1B Req 1C Req 3A Req 3B Req 3C What is the company's absorption costing net operating income (loss) for the quarter? (Round your intermediate calculations to 2 decimal places.) Tami's Creations, Incorporated Absorption Costing Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Total 0 $ 0 Req 1A Req 1B Req 1C Req 3A Req 3B Req 3C Reconcile the variable and absorption costing net operating income (loss) figures. (Losses and deductions should be entered as a negative.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income (loss) Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing Absorption costing net operating income (loss) Req 1A Req 1B Req 1C Req 3A Req 3B Req 3C During the second quarter of operations, the company again produced 32,000 units but sold 35,000 units. (Assume no change in total fixed costs.) What is the company's variable costing net operating income (loss) for the second quarter? (Round your intermediate calculations to 2 decimal places.) Tami's Creations, Incorporated Sales Variable expenses: Variable Costing Income Statement Variable cost of goods sold Variable selling and administrative Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Net operating income < Req 1C 0 0 0 S 0 Req 3B > Req 1A Reg 1B Req 1C Req 3A Req 3B Req 3C During the second quarter of operations, the company again produced 32,000 units but sold 35,000 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, Incorporated Absorption Costing Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Total 0 $ 0 Req 1A Req 1B Req 1C Req 3A Req 3B Req 3C During the second quarter of operations, the company again produced 32,000 units but sold 35,000 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 Variable costing net operating income (loss) Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing Absorption costing net operating income (loss)