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Tami Tyler opened Tami's Creations, Incorporated, a small manufacturing company, at the beginning of the...

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Accounting

Tami Tyler opened Tami's Creations, Incorporated, 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 just completed a course in managerial accounting at State University.
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she hoped to use the statement as support for a bank loan. Another friend, a CPA, insists the company should be using absorption costing rather than variable costing and claims if absorption costing had been used, the company probably would have reported a profit for the quarter.
At this point, Ms. Tyler makes only one product-a swimsuit. Production and cost data for the first quarter follow:
\table[[Units produced,31,600],[Units sold,28,600],[Variable costs per unit:,$7.50
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