You are hired as a new cost accountant to Ciccetti Corporation. The company manager, David, is having a meeting with you in his office. He brought you this budgeted income statement that was completed by the previous cost accountant. David asks you to provide him with a report explaining the statement in clear, straightforward language, and how you plan to handle the annual budget.
|Flexible Budget Performance Part 2|
|Flexible Budget||Activity Variances||Planning Budget|
|Customers served (q)||36,000||33,000|
|Revenue ($4.80q)||$172,800||$14,400 F||$158,400|
|Wages and salaries ($36,900 + 1.60q)||94,500||4,800 U||89,700|
|Supplies ($0.90q)||32,400||2,700 U||29,700|
|Miscellaneous Expense ($6,300 + $0.40q)||20,700||1,200 U||19,500|
|Total expense||160,900||8,700 U||152,200|
|Net operating income||$11,900||$5,700 F||$6,200|
Write a 2–3 page report in which you:
- Explain the budgeted income statement.
- Outline how you would create annual budgeted financial statements.
- Analyze the difference between a static budget and a flexible budget, including the importance of each.
- Evaluate the importance of reading and correctly interpreting budgeted financial statements.
- Use three sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment.
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