I did the first requirement correctly, but need some help with the other require

Question

I did the first requirement correctly, but need some help with the other requirements thanks

Tami Tyler opened Tami's Creations, Inc, a small manufacturing company, at the beginning of the year Getting the company through rs 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 Tani's Creations, Inc Income Statement For the Quarter Ended March 31 Sales (28,708 units) Variable expenses: S 1,148,8e Variable cost of goods sold Variable selling and administrative s 496,510 280,908 Contribution margin Fixed expensesz 458 590 Fixed manufacturing overhead Fixed selling and sdministrative 272,620 190,879 Net operating loss 512,900) Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for bank loan. Another friend, a CPA insists that the company should be using absorption costing rather than variable costing an argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter. earch

Explanation / Answer

Construct The Absorption Costing Unit Product Cost Q-1 Direct Material 7.50 Direct labour 7.80 Variable Manufacturing overheads 2.00 Fixed Manufacturing overheads 8.60 Absorption costing unit prroduct cost 25.90 Construct the Absorption Costing Income Statement Under FIFO Q-1 Sales $1,148,000 Cost of Goods sold 743330 Gross Margin $404,670 Selling and distribution expense 391,770 Net operating income 12,900 RECONCILIATION STATEMENT: Net income as per Variable costing -12900 Add: Fixed OH deferred in Ending Inventory (3000 units @ 8.60) 25800 Net Income as per Aabsorption costing 12900 Construct The Variable Costing Income Statement under FIFO Q2 Sales 1388000 Less: Variable cost    variable cost of goods sold 600,310    Variable selling expense 242,900 Contribution margin 544790 Fixed expense:    Fixed Manufacturing overheads 272620    Fixed selling expense 190870 Net operating Income 81300 Construct the Absorption Costing Income Statement Under FIFO Q-1 Sales $1,388,000 Cost of Goods sold 898730 Gross Margin $489,270 Selling and distribution expense 433,770 Net operating income 55,500 RECONCILIATION STATEMENT: Net income as per Variable costing 81300 Less: Fixed OH released in Beginning Inventory (3000 units @ 8.60) 25800 Net Income as per Aabsorption costing 55500

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