Its as shown in the firm's income statements presented below. LaAnn Sands, CEO and founder of the firm, expressed concern that the cash account and the firm's cash declined substantially between 2012 and 2013. Salza's complete balance sheets are also shown. Ms. Sands is seeking your assistance in the preparation of a statement of cash flows for Salza Technology,
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
LeAnn Sands has reason to believe that 2014 will be a replication of 2013 except that cost of goods sold is expected to be 65 percent of the estimated $ 450,000 in revenues. Other income statement relationships are expected to remain the same in 2014 as they were in 2013. Calculate the EBDAT breakeven point for 2014 for Salza in terms of survival revenues.
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