Question

Kool-Times installed nine pools during May. Prepare an income statement performance report for Kool-Time for May, using Exhibit 10-7 as a guide. Assume that the actual sales price per pool is $12,000, actual variable expenses total $61,000, and actual fixed expenses are $19,000 in May. The master budget was prepared with the following assumptions: variable cost of $8,000 per pool, fixed expenses of $20,000 per month, and anticipated sales volume of eight pools at $12,000 per pool.
In exhibit
Requirement
Compute the sales volume variance and flexible budget variance. Use these variances to explain to Kool-Time’s management why May’s operating income differs from the operating income shown in the static budget.


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  • CreatedApril 30, 2015
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