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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

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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 Tami's Creations, Incorporated Income Statement For the Quarter Ended March 31 Sales (28,500 units) $1,140,000 Variable expenses: Variable cost of goods sold $ 478,800 Variable selling and administrative 176,700 655,500 Contribution margin 484,500 Fixed expenses Pixed manufacturing overhead 283,500 Fixed selling and administrative 214,500 498.000 Not operating 100 S13,500) 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 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: 31,500 28,500 Units produced Units sold Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $7.20 $ 7.80 $ 1.80 $6.20 During the second quarter of operations, the company again produced 31,500 units but sold 34,500 units. What is the company's variable costing net operating income (loss) for the second quarter? Tami's Creations, Incorporated Variable Costing Income Statement Sales Variable expenses 0 0 0 Net operating income (loss)

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