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.
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.

  • CreatedApril 30, 2015
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