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 hasjust completed a course in managerial accounting at State University. Tami's Creations, Incorporated Income Statement For the Quarter Ended March 31 Sales (28,799 units) $ 1,148,696 Variable expenses: Variable cost of goods sold $ 479,299 Variable selling and administrative 192,296 671,586 Contribution margin 476,426 Fixed expenses: Fixed manufacturing overhead 253,666 Fixed selling and administrative 234,829 488,426 Net operating loss 5 (12,669) 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 ratherthan 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 31,796 Units sold 28,796 Variable costs per unit: Direct materials $ 7.46 Direct labor $ 7.46 Variable manufacturing overhead $ 1.96 Variable selling and administrative $ 6.76 Req 1A Req lB Req 1C Req 3A Req 35 Req 3C During the second quarter of operations, the company again produced 31,700 units but sold 34,700 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.) $ sa'es 1,388,000 0 Variable expenses: Variable cost of goods sold $ 579,490 0 Variable selling and administrative 232,490 0 Variable cost of goods sold 50,100 0 949,680 438,320 Contribution margin 00 Fixed expenses: Fixed manufacturing overhead 253,600 a 234,820 a 488,420 9 87,600 0 1,064,440 _ . $ Net operatlng Income (626 120) Fixed selling and administrative Req 1A Req lB Req 1C Req 3A Req 3B Req 3C During the second quarter of operations, the company again produced 31,700 units but sold 34,700 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.) Variable costing net operating income (loss) $ 87,600 0 Deduct: Fixed manufacturing overhead cost released from inventory under absorption costing o Absorption costing net operating income (loss) $ 63,600 a