Yazoo Company has provided the following data for 2018:
Budget
Sales......................................................................................... $500,000
Variable product costs..................................................................... 164,000
Variable selling expense.....................................................................46,000
Other variable expenses...................................................................... 8,000
Fixed product costs......................................................................... 70,000
Fixed selling expense........................................................................26,000
Other fixed expenses......................................................................... 2,000
Interest expense............................................................................... 1,000
Actual results
Sales......................................................................................... 520,000
Variable product costs.................................................................... 168,000
Variable selling expense.................................................................. 44,000
Other variable expenses..................................................................... 7,000
Fixed product costs........................................................................ 64,000
Fixed selling expense......................................................................22,000
Other fixed expenses....................................................................... 8,000
Interest expense............................................................................. 1,050
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).