Tamis Creations, Inc. Income Statement For the Quarter Ended March 31

Sales (24,000 units)

$

871,200

Variable expenses:

Variable cost of goods sold

$

280,800

Variable selling and administrative

190,800

471,600

Contribution margin

399,600

Fixed expenses:

Fixed manufacturing overhead

221,400

Fixed selling and administrative

221,000

442,400

Net operating loss

$

( 42,800)

Units produced

27,000

Units sold

24,000

Variable costs per unit:

Direct materials

$

7.40

Direct labor

$

2.60

Variable manufacturing overhead

$

1.70

Variable selling and administrative

$

7.95

1. Compute the unit product cost under absorption costing.

2. Redo the companys income statement for the quarter using absorption costing.

3. Reconcile the variable and absorption costing net operating income (loss) figures.

4.

During the second quarter of operations, the company again produced 27,000 units but sold 30,000 units. (Assume no change in total fixed costs.)

a.	Prepare a contribution format income statement for the quarter using variable costing 5. Reconcile the variable costing and absorption costing net operating incomes.