Tami Tyurcepeoed Tomis Creptiotn, lac, as amat mamufacturing epmpary at the beginning of the yene Gething the company throuphis Gist quarter of apei bions ploced a cecaldecbble stunit sn Ms. Tylures perional fenences. The followirg inedme statement for the first quather wos purepared by a thend wha bes just camplesed a course in marsgenal accointing at state Uabority Ma. Tyler is doicouraged trver the lost shown fer the quartes, parficulaty because sho hed planned to use the statement as suppent for a bonkioan Another friend, a CPA. insists thot the company shecild be ising ebnorpten costing rather than variable. costing and argues that of absorptian costing had been used that cempany probably would have reported at leas some profit for the quartet. At ahis point, Ms. Tyler is misnufosturing only ene product-a s vimsuit. Production and cost dota relating to the swimsult for the fint puster follow: Required: 1. Complete the following: a. Compute the unit product cost under absarplian costing. b. What is the company's absocpson costing net operating income fossi) for the quarter? C. Reconcile the variable and absorption costing net operating income (oss) figures. 3. During the second quarter of operatons: the company again prodused 32,000 units but sold 35,000 ynits. (Assume no change in total fixed eosts) 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 operasing income llasst for the secend quarter? c. Reconcie the variable costing and absorgtion costing net operating incomes for the second quarter. Complete this question by entering your answers in the tabs below. Tami Tyler opened Tami's Creations, Inc, 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. 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: 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 unit 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 for th second quarter
