Question
Question 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
Question
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%
- What does an AVB stand for?
- What is the total revenue for March 2020 when compared to the budget?
- What is the variance from the budget in the net income for the month?
- What is the income tax percentage for the month?
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
9th Canadian Edition, Volume 2
470964731, 978-0470964736, 978-0470161012
