ulz - Chapter 6 iactivity/question-grouSavedHelp1Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through itsfirst quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the firstquarter was prepared by a friend who has just completed a course in managerial accounting at State University.Tami's Creations, Inc.Income StatementFor the Quarter Ended March 31Sales (28, 400 units)Variable expenses:Variable cost of goos soldVariable selling andladministrativeContribution marginFixed expenses:Fixed manufacturing overheadFixed selling and administrativeNet operating loss$1,136, 000$ 440, 200178, 920619, 120516, 880251, 200277,680528, 880$( 12,000)Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support fora bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing andargues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.At this point, Ms. Tyler is manufacturing only one product-a swimsuit. Production and cost data relating to the swimsuit for the firstquarter follow:Units producedUnits soldVariable costs per unit:Direct materialsDirect laborVariable manufacturing overheadVariable selling and administrative31, 40028, 400$ 7.60$ 6.00$ 1.90$ 6.30Prev1 of 5Next > HelpSave & ExitSubmU. VVIIOL IS ue CUmpal ny > ausuIPLIUII CUSLII Iy Tiel upeiau ny Ue Iuss) IUI Ie yuoI Le tc. Reconcile the variable and absorption costing net operating Income (loss) figures.3. During the second quarter of operations, the company again produced 31,400 units but sold 34,400 units. (Assume no change intotal 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.Check my workComplete this question by entering your answers in the tabs below.Req 1AReg 1BReq 1CReq 3AReq 3BReq 3CWhat is the company's absorption costing net operating income (loss) for the quarter? (Round your intermediate calculationsto 2 decimal places.)Tami's Creations, Inc.Absorption Costing Income StatementTotalSales834,900Cost of goods sold(667,400)Gross margin167,500Selling and administrative expenses(178,920)Net operating income (loss)< Req 1AReq 10 >Prev1 of 5Next >DELL

Sales revenue: It is the revenue earned by a business on selling the goods or providing services to…

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, 400 units) Variable expenses: Variable cost of goors sold Variable selling andladministrative Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Net operating loss $1,136, 000 $ 440, 200 178,920 619, 120 516, 880 251, 200 277, 680 528, 880 $( 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. 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, 400 28, 400 Units produced Units sold Variable costs per unit: Direct materials $ 7.60 $ 6.00 $ 1.90 $ 6.30 Direct labor Variable manufacturing overhead Variable selling and administrative

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q