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Dancin' Donuts, established in January 2019, is a thriving new business specializing in low-carb donuts. The 2019 keto diet fad led to increased sales, and

Dancin' Donuts, established in January 2019, is a thriving new business specializing in low-carb donuts. The 2019 keto diet fad led to increased sales, and the chief financial officer (CFO) prepared a robust budget for 2020. In early March 2020, the small business had record-breaking sales but abruptly needed to shut its doors because of the global pandemic. The CFO conducted the following analysis for the month of March:


Dancin' Donuts March 2020

Budget

Actuals

$ Var

%

Total Revenue

200,000

196,947

-3,053

-2%

Total Cost of Goods Sold

100,000

98,000

-2,000

-2%

GROSS PROFIT

100,000

98,947

-1,053

-1%

Total Expense

75,000

72,000

-3,000

-4%

Total Interest Income

200

100

-100

-50%

Total Other Expense

1,000

1,000

0

0%

-800

-900

-100

13%

Earnings Before Interest, Taxes, Depreciation, & Amortization (EBITDA)

24,200

26,047

1,847

8%

Total Interest Expense

6,400

6,385

-15

0%

Total Depreciation & Amortization

10,000

10,000

0

0%

Earnings Before Taxes (EBT)

7,800

9,662

1,862

24%

Total Income Taxes (30%)

2,340

2,899

559

24%

Net Income

5,460

6,764

1,304

24%

Please answer the following questions:

  1. What does AVB stand for?
  2. What is the total revenue for March 2020 when compared to the budget?
  3. What is the variance from the budget to the net income for the month?
  4. What is the income tax percentage for the month?

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1 AVB is actual versus budget variance analysis 2 Actual total revenue for March is 196947 compared ... blur-text-image

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