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. $ 1,132,000 Tami's Creations, Incorporated Income Statement For the Quarter Ended March 31 Sales (28,300 units) Variable expenses: Variable cost of goods sold Variable selling and administrative Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Net operating loss $ 472,610 189,610 662,220 469,780 281,700 201,580 483, 280 $ 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 product-a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: 31,300 28,300 Units produced Units sold Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 7.10 $ 7.70 $ 1.90 $ 6.70 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 31,300 units but sold 34,300 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 for the second quarter. Req 1A Req 1B Req 10 Reg 3A Req 38 Req 30 During the second quarter of operations, the company againoduced 31,300 units but sold 34,300 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 $ 728,000 $ 121,940 x 263,860 x x Variable selling and administrative Beginning merchandise inventory Ending merchandise inventory Variable selling and administrative Contribution margin Fixed expenses Fixed manufacturing overhead 0 X 50.100 X 435,900 292,100 281.700 Fixed selling and administrative Net operating income (loss) 201,580 483,280 2 a 40 * w 3 on 09 During the second quarter of operations, the company again produced 31,300 units but sold 34,300 units. 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) $ (191,180) * Add Fixed manufacturing overhead cost released from inventory under absorption costing 27 000 Absorption costing net operating income (loss) $ 218. 180) > Reg 1A Req 1B Reg 10 Req 3A Req BB Reg 30 During the second quarter of operations, the company again produced 31,300 units but sold 34,300 units. What is the company's absorption costing net operating income (loss) for the second quarter? (Round your intermediate calculations to decimal places.) Tami's Creations, Incorporated Absorption Costing Income Statement Total Sales $ 728,000 Cost of goods sold 622,660 8 Gross margin 105,340 Selling and administrative expenses 201,580 Net operating income (loss) (218 180) Rea 3A 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. $ 1,132,000 Tami's Creations, Incorporated Income Statement For the Quarter Ended March 31 Sales (28,300 units) Variable expenses: Variable cost of goods sold Variable selling and administrative Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Net operating loss $ 472,610 189,610 662,220 469,780 281,700 201,580 483, 280 $ 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 product-a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: 31,300 28,300 Units produced Units sold Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $ 7.10 $ 7.70 $ 1.90 $ 6.70 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 31,300 units but sold 34,300 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 for the second quarter. Req 1A Req 1B Req 10 Reg 3A Req 38 Req 30 During the second quarter of operations, the company againoduced 31,300 units but sold 34,300 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 $ 728,000 $ 121,940 x 263,860 x x Variable selling and administrative Beginning merchandise inventory Ending merchandise inventory Variable selling and administrative Contribution margin Fixed expenses Fixed manufacturing overhead 0 X 50.100 X 435,900 292,100 281.700 Fixed selling and administrative Net operating income (loss) 201,580 483,280 2 a 40 * w 3 on 09 During the second quarter of operations, the company again produced 31,300 units but sold 34,300 units. 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) $ (191,180) * Add Fixed manufacturing overhead cost released from inventory under absorption costing 27 000 Absorption costing net operating income (loss) $ 218. 180) > Reg 1A Req 1B Reg 10 Req 3A Req BB Reg 30 During the second quarter of operations, the company again produced 31,300 units but sold 34,300 units. What is the company's absorption costing net operating income (loss) for the second quarter? (Round your intermediate calculations to decimal places.) Tami's Creations, Incorporated Absorption Costing Income Statement Total Sales $ 728,000 Cost of goods sold 622,660 8 Gross margin 105,340 Selling and administrative expenses 201,580 Net operating income (loss) (218 180) Rea 3A