Ladmilla Company has provided the following 2011 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 them as favorable (F) or unfavorable (U).

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Budget Sales $500,000 204,000 50,000 3,600 16,600 24,300 2,200 800 Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense Variances 8,600 U 4,000 F 2,500 U 1,200 U 220 F 390 F 150 U 80 F Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense