Homework Help Save & Exit Submit Check myrk 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 Statenest For the Quarter Ended March 31 $1,160,000 Sales (29,000 units) Variable expensess Variable cost of goods sold Variable selling and administrative Contribution margin Fixed expenses Fixed manufacturing overhead Fixed selling and administrative Net operating loss $458,200 203,000 661,200 490,000 256,000 254,000 510,000 $12,0001 Ms. Tyler is discouraged over the loss shown for the quarter, particularly because sh 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 a cost data relating to the swimsuit for the first quarter follow Units produced. 32,000 Units sold 29,000 Variable costs per units Direct materials $7.30 Direct labor $6.70 Variable manufacturing overhead $1.00 Variable selling and administrative $7.00