Homework Help is Here – Start Your Trial Now!
Business
Accounting
AllTalk Technologies manufactures capacitors for cellular base stations and other communications applications. The company's January 2021 flexible budget income statement shows output levels of 6,500, 8,000, and 10,000 units. The static budget was based on expected sales of 8,000 units. ALLTALK TECHNOLOGIES Income Statement Performance Report Month Ended January 31, 2021 By Units (Capacitors) Per Unit 6.500 8.000 Sales revenue $ 156.000 192.000 240.000 Variable expenses $ 65.000 80.000 100.000 Contribution margin 91.000 112.000 140.000 Fixed expenses 53.000 $ 53.000 Operating income $38.000 $59.000 $87.000 The company sold 10,000 units during January, and its actual operating income was as follows: ALLTALK TECHNOLOGIES Income Statement Month Ended January 31, 2021 Sales revenue $ 246.000 Variable expenses 104.500 Contribution margin $ 141.500 Fixed expenses 54.000 Operating income $ 87.500 Requirements 1. Prepare an income statement performance report for January. 2. What was the effect on AllTalk's operating income of selling 2,000 units more than the static budget level of sales? 3. What is AllTalk's static budget variance? Explain why the income statement performance report provides more useful information to AllTalk's managers than the simple static budget variance. What insights can AllTalk's managers draw from this performance report? 24 10 $ 53.000 $ 10.000

AllTalk Technologies manufactures capacitors for cellular base stations and other communications applications. The company's January 2021 flexible budget income statement shows output levels of 6,500, 8,000, and 10,000 units. The static budget was based on expected sales of 8,000 units. ALLTALK TECHNOLOGIES Income Statement Performance Report Month Ended January 31, 2021 By Units (Capacitors) Per Unit 6.500 8.000 Sales revenue $ 156.000 192.000 240.000 Variable expenses $ 65.000 80.000 100.000 Contribution margin 91.000 112.000 140.000 Fixed expenses 53.000 $ 53.000 Operating income $38.000 $59.000 $87.000 The company sold 10,000 units during January, and its actual operating income was as follows: ALLTALK TECHNOLOGIES Income Statement Month Ended January 31, 2021 Sales revenue $ 246.000 Variable expenses 104.500 Contribution margin $ 141.500 Fixed expenses 54.000 Operating income $ 87.500 Requirements 1. Prepare an income statement performance report for January. 2. What was the effect on AllTalk's operating income of selling 2,000 units more than the static budget level of sales? 3. What is AllTalk's static budget variance? Explain why the income statement performance report provides more useful information to AllTalk's managers than the simple static budget variance. What insights can AllTalk's managers draw from this performance report? 24 10 $ 53.000 $ 10.000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
icon
Concept explainers
Question
AllTalk Technologies manufactures capacitors for cellular base stations and other communications applications. The company's January 2021 flexible budget income statement shows output levels of 6,500, 8,000, and 10,000 units. The static budget was based on expected sales of 8,000 units. ALLTALK TECHNOLOGIES Income Statement Performance Report Month Ended January 31, 2021 By Units (Capacitors) Per Unit 6.500 8.000 Sales revenue $ 156.000 192.000 240.000 $ 65.000 80.000 100.000 Variable expenses Contribution margin 91.000 112.000 140.000 Fixed expenses 53.000 $ 53.000 53.000 Operating income $38.000 $59.000 $87.000 The company sold 10,000 units during January, and its actual operating income was as follows: ALLTALK TECHNOLOGIES Income Statement Month Ended January 31, 2021 Sales revenue $ 246.000 Variable expenses 104.500 Contribution margin $ 141.500 Fixed expenses 54.000 Operating income $ 87.500 Requirements 1. Prepare an income statement performance report for January. 2. What was the effect on AllTalk's operating income of selling 2,000 units more than the static budget level of sales? 3. What is AllTalk's static budget variance? Explain why the income statement performance report provides more useful information to AllTalk's managers than the simple static budget variance. What insights can AllTalk's managers draw from this performance report? 24 10 $ $ 10.000
Transcribed Image Text:AllTalk Technologies manufactures capacitors for cellular base stations and other communications applications. The company's January 2021 flexible budget income statement shows output levels of 6,500, 8,000, and 10,000 units. The static budget was based on expected sales of 8,000 units. ALLTALK TECHNOLOGIES Income Statement Performance Report Month Ended January 31, 2021 By Units (Capacitors) Per Unit 6.500 8.000 Sales revenue $ 156.000 192.000 240.000 $ 65.000 80.000 100.000 Variable expenses Contribution margin 91.000 112.000 140.000 Fixed expenses 53.000 $ 53.000 53.000 Operating income $38.000 $59.000 $87.000 The company sold 10,000 units during January, and its actual operating income was as follows: ALLTALK TECHNOLOGIES Income Statement Month Ended January 31, 2021 Sales revenue $ 246.000 Variable expenses 104.500 Contribution margin $ 141.500 Fixed expenses 54.000 Operating income $ 87.500 Requirements 1. Prepare an income statement performance report for January. 2. What was the effect on AllTalk's operating income of selling 2,000 units more than the static budget level of sales? 3. What is AllTalk's static budget variance? Explain why the income statement performance report provides more useful information to AllTalk's managers than the simple static budget variance. What insights can AllTalk's managers draw from this performance report? 24 10 $ $ 10.000
Output units Sales revenue Variable expenses Contribution margin Fixed expenses Operating income Actual Results at Actual Prices $ ALLTALK TECHNOLOGIES Income Statement Performance Report Month Ended January 31, 2021 Flexible Budget Flexible Budget for Actual Variance Number of Output Units $ 10.000 246.000 104.500 141.500 54.000 87.500 Sales Volume Variance Sales Volume Variance
Transcribed Image Text:Output units Sales revenue Variable expenses Contribution margin Fixed expenses Operating income Actual Results at Actual Prices $ ALLTALK TECHNOLOGIES Income Statement Performance Report Month Ended January 31, 2021 Flexible Budget Flexible Budget for Actual Variance Number of Output Units $ 10.000 246.000 104.500 141.500 54.000 87.500 Sales Volume Variance Sales Volume Variance
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS