Refer to the information in Problem 23-1B. Tohono Company’s actual income statement follows.

Required

1. Prepare a flexible budget performance report for 2019.

2. Compute and interpret both the

(a) Sales variance

(b) Direct materials cost variance.

Transcribed Image Text:

Statement of Income from Operations For Year Ended December 31, 2019 Sales (24,000 units) ... $3,648,000 Cost of goods sold Direct materials . Direct labor...... Machinery repairs (variable cost) $1,400,000 360,000 60,000 Depreciation-Machinery 250,000 Utilities (variable cost, $64,000). Plant manager salaries Gross profit ..... 218,000 155,000 2,443,000 1,205,000 Selling expenses Packaging.. 90,000 Shipping ..... Sales salary (annual) General and administrative expenses 124,000 162,000 376,000 Advertising expense 104,000 Salaries 232,000 Entertainment expense 100,000 436,000 $ 393,000 Income from operations