Harris Company has provided the following 2008 data.

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).

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Budget Sales Variable product costs Variable selling expenses Other variable expenses Fixed product costs Fixed selling expenses Other fixed expenses Interest expense $400,000 155,000 45,000 3,600 16,600 24,300 Variances Sales Variable product costs Variable selling expenses Other variable expenses Fixed product costs Fixed selling expenses Other fixed expenses Interest expense 8,600 U 4,000 F 2,500 U 1,200 U 220 F 390 F 150 U 80 F