Prepare a schedule comparing the actual results with

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Reference no: EM13482292

A retail department store used the following cost-volume relationship were used in developing a flexible budget for the company for the currnet year:

                                                       Yearly fixed expenses variable expenses per sales dollar
cost of merchandisesold...........                                                $0.600
selling and promotionexpense.......   $210,000                         0.082
building occupancyexpense................186,000                          0.022
buyingexpense...................................150,000    0.040
deliveryexpense..................................111,000                          0.010
credit andcollection..............................72,000                            0.002
administrativeexpense........................531,000    0.003
totals.................................................. $1,260,000    $0.759

Management expected to attain a sales level of $12 million during the current year. At the end of the year, the actual results achieved by the company were:

net sales..............................................$10,500,00
cost of goodssold............................... 6,180,000
seliing and promoting expenses............ 1,020,000
building occupancyexpenses............... 420,000
buyingexpenses................................. 594,000
deliveryexpense................................. 183,000
credit and collectionexpense............... 90,000
administrativeexpense........................ 564,000

Prepare a schedule comparing the actual results with flexible budget amounts developed for the actual sales volume of$10,500,000. Organize your schedule as a partial multiplestep income statement, ending with operating income. Include seperate columns for (1) flexible budget amounts, (2) actual amounts, and (3) any amount over/under budget. use the costvolume relationships given in the problem to compute the flexiblebudget amounts.

Reference no: EM13482292

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