Zachary Company has provided the following for the year. Budget Sales $ 508,000 Variable product costs 186,000 Variable selling expense 42,000 Other variable expenses 3,000 Fixed product costs 16,400 Fixed selling expense 24,200 Other fixed expenses 1,600 Interest expense 660 Variances Sales 8,100 U Variable product costs 4,700 F Variable selling expense 2,200 U Other variable expenses 1,200 U Fixed product costs 300 F Fixed selling expense 480 F Other fixed expenses 110 U Interest expense 140 F Required 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).)
Zachary Company has provided the following for the year. Budget Sales $ 508,000 Variable product costs 186,000 Variable selling expense 42,000 Other variable expenses 3,000 Fixed product costs 16,400 Fixed selling expense 24,200 Other fixed expenses 1,600 Interest expense 660 Variances Sales 8,100 U Variable product costs 4,700 F Variable selling expense 2,200 U Other variable expenses 1,200 U Fixed product costs 300 F Fixed selling expense 480 F Other fixed expenses 110 U Interest expense 140 F Required 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).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Zachary Company has provided the following for the year.
| Budget | |||
| Sales | $ | 508,000 | |
| Variable product costs | 186,000 | ||
| Variable selling expense | 42,000 | ||
| Other variable expenses | 3,000 | ||
| Fixed product costs | 16,400 | ||
| Fixed selling expense | 24,200 | ||
| Other fixed expenses | 1,600 | ||
| Interest expense | 660 | ||
| Variances | |||
| Sales | 8,100 | U | |
| Variable product costs | 4,700 | F | |
| Variable selling expense | 2,200 | U | |
| Other variable expenses | 1,200 | U | |
| Fixed product costs | 300 | F | |
| Fixed selling expense | 480 | F | |
| Other fixed expenses | 110 | U | |
| Interest expense | 140 | F | |
Required
- 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).)
Transcribed Image Text:Sales
Variable expenses:
Fixed expenses:
ZACHARY COMPANY
Internal Income Statement
Budget
Actual
Variance
Effect
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