The Abel Web Design Company Income Statement compared to Budget For the month ending April 30, 2015 Actual Budget Variance Sales $ 96,700 $ 100,000 $ -3,300 Less sales discounts 975 1,200 -225 Net sales 95,725 98,800 -3,075 Operating Expenses Selling Expenses Sales salaries 5802 6,000 -198 Advertising and promotion 7000 8,000 -1,000 Total selling expenses 12,802 14,000 -1,198 Administrative expenses Office salaries 26,702 24,000 2,702 Office supplies 6,490 5,000 1,490 Rent 19,000 18,000 1,000 Insurance 2,490 2,400 90 Telephone 2,970 3,000 -30 Utilities 4,970 3,600 1,370 Auto expense 5,880 6,000 -120 Depreciation on computer equipment 6,975 3,840 3,135 Interest expense 1,800 1,200 600 Total administrative expenses 77,277 67,040 10,237 Total operating expenses 90,079 81,040 9,039 Net income $ 5,645 $ 17,760 $ -12,114 1. Select 4 expense accounts and suggest possible scenarios that could account for the variance between the actual and budgeted expense. Where applicable, make recommendations to management for controlling the expenses. Consider the following information when explaining to management possible reasons for the variance between the actual and budget income statement expenses: The company has a December 31, 2015 fiscal year end. Sales staff is paid a 6% commission on sales. The insurance company increased the monthly insurance in October to $230.00 per month. 2. Mr. Abel is very disappointed that his actual net income was over $12,000 less than he had forecasted. Make two recommendations to him as to how to improve his bottom line year next year