Refer to the information in Problem 23-1B. Tohono Company's actual income statement for 2017 follows.

Required
1. Prepare a flexible budget performance report for 2017.
2. Analyze and interpret both the
(a) Sales variance
(b) Direct materials cost variance.

Transcribed Image Text:

TOHONO COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (24,000 unlts) Cost of goods sold $3,648,000 $1,400,000 360,000 60,000 250,000 218,000 155,000 Direct materlals Direct labor Machinery repalrs (varlable cost) Utilitles (variable cost, $64,000) Plant manager salarles 2,443,000 1,205,000 Gross profit Selling expenses Packaging Shipping Sales salary (annual) 90,000 124,000 162,000 376,000 General and adminlstrative expenses Advertising expense Salarles Entertalnment expense 104,000 232,000 100,000 436,000 Income from operations