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On January 6, the Xaviere Co. reported that, by earning an actual income of $5,000 in December, the company missed meeting its planned target income by $7,000. Due to the fact that the actual volume of activity in December was different from the original level of activity planned for the month, the company stated that it also missed the flexible budget income by $3,000. The failure to meet each target was considered to be unfavourable. Required: Calculate the operating income (loss) that the flexible budget and the static budget would have shown for December.

On January 6, the Xaviere Co. reported that, by earning an actual income of $5,000 in December, the company missed meeting its planned target income by $7,000. Due to the fact that the actual volume of activity in December was different from the original level of activity planned for the month, the company stated that it also missed the flexible budget income by $3,000. The failure to meet each target was considered to be unfavourable. Required: Calculate the operating income (loss) that the flexible budget and the static budget would have shown for December.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 6, the Xaviere Co. reported that, by earning an actual income of $5,000 in December, the company missed meeting its planned target income by $7,000. Due to the fact that the actual volume of activity in December was different from the original level of activity planned for the month, the company stated that it also missed the flexible budget income by $3,000. The failure to meet each target was considered to be unfavourable. Required: Calculate the operating income (loss) that the flexible budget and the static budget would have shown for December.
Transcribed Image Text:On January 6, the Xaviere Co. reported that, by earning an actual income of $5,000 in December, the company missed meeting its planned target income by $7,000. Due to the fact that the actual volume of activity in December was different from the original level of activity planned for the month, the company stated that it also missed the flexible budget income by $3,000. The failure to meet each target was considered to be unfavourable. Required: Calculate the operating income (loss) that the flexible budget and the static budget would have shown for December.
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