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at this point, Ms. Tyler is manufacturing only one product-a swimsuit. Production and cost data relating to the swimsuit for the f uarter follow: Units produced Units sold Variable costs per unit: Direct materials 31, 200 28,200 $ 7.50 $ 5.80 $ 1.70 $ 6.90 Direct labor Variable manufacturing overhead Variable selling and administrative equired: Complete the following: . Compute the unit product cost under absorption costing. . What is the company's absorption costing net operating income (loss) for the quarter? . Reconcile the variable and absorption costing net operating income (loss) figures. . During the second quarter of operations, the company again produced 31,200 units but sold 34,200 units. (Assume no chang otal fixed costs.) . What is the company's variable costing net operating income (loss) for the second quarter? . What is the company's absorption costing net operating income (loss) for the second quarter? . Reconcile the variable costing and absorption costing net operating incomes for the second quarter.

at this point, Ms. Tyler is manufacturing only one product-a swimsuit. Production and cost data relating to the swimsuit for the f uarter follow: Units produced Units sold Variable costs per unit: Direct materials 31, 200 28,200 $ 7.50 $ 5.80 $ 1.70 $ 6.90 Direct labor Variable manufacturing overhead Variable selling and administrative equired: Complete the following: . Compute the unit product cost under absorption costing. . What is the company's absorption costing net operating income (loss) for the quarter? . Reconcile the variable and absorption costing net operating income (loss) figures. . During the second quarter of operations, the company again produced 31,200 units but sold 34,200 units. (Assume no chang otal fixed costs.) . What is the company's variable costing net operating income (loss) for the second quarter? . What is the company's absorption costing net operating income (loss) for the second quarter? . Reconcile the variable costing and absorption costing net operating incomes for the second quarter.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please solve 3a, 3b, and 3c

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: | Units produced | 31,200 | |-------------------------|--------| | Units sold | 28,200 | **Variable costs per unit:** - Direct materials: $7.50 - Direct labor: $5.80 - Variable manufacturing overhead: $1.70 - Variable selling and administrative: $6.90 **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 31,200 units but sold 34,200 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.
Transcribed Image Text: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: | Units produced | 31,200 | |-------------------------|--------| | Units sold | 28,200 | **Variable costs per unit:** - Direct materials: $7.50 - Direct labor: $5.80 - Variable manufacturing overhead: $1.70 - Variable selling and administrative: $6.90 **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 31,200 units but sold 34,200 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.
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. **Tami’s Creations, Inc.** **Income Statement** *For the Quarter Ended March 31* - **Sales (28,200 units):** $1,128,000 - **Variable expenses:** - Variable cost of goods sold: $423,000 - Variable selling and administrative: $194,580 - Total Variable Expenses: $617,580 - **Contribution margin:** $510,420 - **Fixed expenses:** - Fixed manufacturing overhead: $249,600 - Fixed selling and administrative: $272,820 - Total Fixed Expenses: $522,420 - **Net operating loss:** $(12,000) 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.
Transcribed Image Text: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. **Tami’s Creations, Inc.** **Income Statement** *For the Quarter Ended March 31* - **Sales (28,200 units):** $1,128,000 - **Variable expenses:** - Variable cost of goods sold: $423,000 - Variable selling and administrative: $194,580 - Total Variable Expenses: $617,580 - **Contribution margin:** $510,420 - **Fixed expenses:** - Fixed manufacturing overhead: $249,600 - Fixed selling and administrative: $272,820 - Total Fixed Expenses: $522,420 - **Net operating loss:** $(12,000) 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.
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