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0 Data Table - X Time 2 Chill Pools Income Statement Performance Report Month Ended June 30 (1) (2) (3) (4) (1H3) Flexible (3H ) Actual Budget Results Flexible for Actual Sales at Actual Budget Number of Volume Prices Variance Output Units\" Variance Output units (pools installed) 10 10 2 F Sales revenue $121,000 $120,000 $24,000 F Variable expenses 83,000 80,000 16,000 U Fixed expenses 22,000 20,000 Total expenses 105900 100.000 16.000 U $ 16,000 $ 20,000 $ 8.000 F Operating income Flexible budget variance, Sales volume variance, $4.000 U $8,000 F Y Static budget variance, $4,000 F * Budgeted sale price is $12,000 per pool, budgeted variable expense is $8,000 per pool, and budgeted total monthly xed expenses are $20,000. Time 2 Chill installed nine pools during July. Prepare an income statement performance report for Time 2 Chill for July, using the table below as a guide. (Click the icon to view the table.) Assume that the actual sales price per pool is $12,800, actual variable expenses total $63,000, and actual fixed expenses are $19,500 in July. The master budget was prepared with the following assumptions: variable cost of $8, 100 per pool, fixed expenses of $20,000 per month, and anticipated sales volume of eight pools at $12,800 per pool Requirement 1 . Compute the sales volume variance and flexible budget variance. Use these variances to explain to Time 2 Chill's management why July's operating income differs from operating income shown in the static budget. Requirement 1. Compute the sales volume variance and flexible budget variance. Use these variances to explain to Time 2 Chill's management why July's operating income differs from operating income shown in the static budget. Prepare an income statement report for Time 2 Chill for July. (For accounts with a zero balance, make sure to enter "0" in the appropriate column. Label each variance as favourable (F) or unfavourable (U). If the variance is zero, do not select a label.) Time 2 Chill Pools Income Statement Performance Report Month Ended July 31 Flexible Budget for Actual Results at Flexible Budget Actual Number of Sales Volume Static (Master) Actual Prices Variance Output Units Variance Budget Output units Sales revenue Variable expenses Fixed expenses Total expenses Operating income Use the sales volume variance and flexible budget variance to explain to Time 2 Chill's management why July's operating income differs from operating income shown in the static budget. Time 2 Chill's actual operating income was $ the static budget. There are two primary reasons: 1. Time 2 Chill actually installed pool than expected. This operating income by $]. 2. Time 2 Chill's actual expenses to install 9 pools were $ than they should have been to install 9 pools. This flexible budget variance means that Time 2 Chill did a job controlling cost
