Time 2 Kool installed 10 pools during June. Prepare an income statement report for Time 2 Kool for June, using the following table as a guide.

*Budgeted sales price is $12,000 per pool, budgeted variable expense is $8,000 per pool, and budgeted total monthly fixed expenses are $20,000.
Assume that the actual sale price per pool is $12,400, actual variable expenses total $65,500, and actual fixed expenses are $19,100 in June. The master budget was prepared with the following assumptions: variable cost of $8,900 per pool, fixed expenses of $20,700 per month, and anticipated sales volume of nine pools at $12,400 per pool.
Requirement
Compute the sales volume variance and flexible budget variances. Use these variances to explain to Time 2 Kool€™s management why June€™s operating income differs from the operating income shown in the static budget.

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Time 2 Kool Pools Income Statement Performance Report Month Ended June 30 (13 Flexible 3)-(5)] Budget Results Flexiblefor Actal Sales Static at Actual BudgeNumber of Volume Master) Prices Variance Output UnitsVariance Budget 10 Actual Output units (pools installed) | 10 | -0- 2 F Sales revenue Variable expenses Fixed expenses Total expenses Operating income $121,000 S1,000 F 83,000 3,000 UU 22,000 2,000 U $120,000 $24,000 F 596,000 80,000 16,000F 64,000 20,000 20,000 105,000| 5,000 U | 100.000 | 16,000 UI 84,000 16,000 S4,000 U20,000 8,000 F $12,000 Flexible budget variance,Sales volume variance, Static budget variance, 34,000 U $8,000 F $4,000 F