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).