Walton Company has provided the following 2018 data Required

Walton Company has provided the following 2018 data:

Required

a. & b. Prepare a budgeted and actual income statement for internal use. Separate operating income from net income in the statements. Calculate variances and identify them as favorable (F) or unfavorable (U) by comparing the budgeted and actual amounts determined. (Select \"None\" if there is no effect (i.e., zero variance).

Answer is not complete.

Budget
Sales	$	505,000
Variable product costs		195,000
Variable selling expense		45,000
Other variable expenses		3,200
Fixed product costs		16,500
Fixed selling expense		23,900
Other fixed expenses		1,700
Interest expense		720
Variances
Sales		8,300	U
Variable product costs		4,900	F
Variable selling expense		1,500	U
Other variable expenses		1,100	U
Fixed product costs		270	F
Fixed selling expense		430	F
Other fixed expenses		170	U
Interest expense		150	F

Solution

WALTON COMPANY INTERNAL INCOME STATEMENT FOR 2018 BUDGET($) ACTUAL($) VARIENCE($) Sales 505,000 496,700 8,300 U variable Exp: Product cost 195,000 190,100 4,900 F Selling Exp 45,000 46,500 1,500 U Other Exp 3,200 4,300 1,100 U Contribution Margin 261,800 255,800 6,000 U Fixed Exp: Product cost 16,500 16,230 270 F Selling Exp 23,900 23,470 430 F Other Exp 1,700 1870 170 U Operating Income(loss) 219,700 214,230 5,470 U Interest Exp 720 570 150 F Net Income (Loss) 218,980 213,660 5,320 U