Adams Company has provided the following for the year.

Budget Sales$517,000

Variable product costs 190,000

Variable selling expense 43,000

Other variable expenses 3,500

Fixed product costs 16,200

Fixed selling expense 24,100

Other fixed expenses 1,500

Interest expense 760

Variances Sales 7,900 U

Variable product costs 4,200 F

Variable selling expense 2,100 U

Other variable expenses 1,500 U

Fixed product costs 270 F

Fixed selling expense 460 F

Other fixed expenses 120 U

Interest expense 170F Required

1. a. Prepare in good form a budgeted and actual income statement for internal use. Separate operating income from net income in the statements and indicate whether each variance is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)