Complete the Flexible Budget Performance Report for Eastern Shore Milky-Way Travel Company by redoing it on an Excel spreadsheet :

See the Blackboard assignment entitled Eastern Shore Milky Way #4 in Learning Unit #8. It The questions are all based on completing the table in I. BEOW. You want to complete it prior to attempting the first project assignment.

You may want to complete the flexible budget below before you answer the questions on the assignment or while you are answering them.

The Eastern Shore Travel Company

Flexible Budget

For the Year Ended December 31, 2020

Flexible Budget Flexible Budget Actual Var

Variable Amount Total Fixed Cost for Sales of 250

Per Unit (Traveler)

Sales $10,000,000 ? $2,250,000,000 ?

Wages 4,400 ? (1,250,000) ?

Food 630 (145,000) ?

Maintenance 160,000 $40,000,000 ? (78,000,000) ?

Climate Suits 7,200 (1,750,000) ?

Depreciation 400,000,000 ? (400,000,000) ?

(ES C2000)

Depreciation 40,000,000 ? (40,000,000) ?

(ES JR2000)

Hotel Rent 1,350,000,000 ? (1,250,000,000) ?

Depreciation

(Furn & Devices) 2,030,000 ? (2,030,000) ?

Insurance 500,000,000 ? (475,000,000) ?

Total Expenses ? (2,248,175,000) ?

Net Income ? $ 1,825,000 ?

The text refers to an "Income from Operations" variance on pages 928 & 929. Since the case study refers to "Net Income" at the bottom of the flexible budget, and "net income" on the case study, and "income from operations" in the text are computed the same way, please assume the variances illustrate the same thing. Suppose that once you compute the flexible budget and fully present it, it shows actual net income of $1,825,000 and flexibly budgeted net income of $124,912,500. Please compute the "Net Income Variance" from this data, indicate whether it is favorable or unfavorable, and show your work.

Write a sentence or more advising the management of Eastern Shore Milky Way company about what this data means, and what action(s) it should take as a result.

(Note: If you had prepared the Eastern Shore Milky Flexible Budget, which was not required, you would have arrived at a flexible budget net income of $124,912,500 if you had done it correctly.)