Income statement for internal use
Harris Company has provided the following 2008 data.
|
Budget |
|
|
Sales |
$400,000 |
|
Variable product costs |
155,000 |
|
Variable selling expenses |
45,000 |
|
Other variable expenses |
3,600 |
|
Fixed product costs |
16,600 |
|
Fixed selling expenses |
24,300 |
|
Other fixed expenses |
2,200 |
|
Interest expense |
800 |
|
Variances |
|
|
Sales |
8,600 U |
|
Variable product costs |
4,000 F |
|
Variable selling expenses |
2,500 U |
|
Other variable expenses |
1,200 U |
|
Fixed product costs |
220 F |
|
Fixed selling expenses |
390 F |
|
Other fixed expenses |
150 U |
|
Interest expense |
80 F |
Required
a. Prepare in good form a budgeted and actual income statement for internal use. Separate operating income from net income in the statements.
b. Calculate variances and identify these as favorable (F) or unfavorable (U).