Answer:
Walton Company
Income Statement
Actual Budgeted Variances
Sales 510,400 $ 519,000 8,600 U
Variable product costs 183400 188,000 4,600 F
Variable selling expense 48100 46,000 2,100 U
Other variable expenses 5100 3,300 1,800 U
Contribution Margin 273,800 281,700 7,900 unfav
Fixed product costs 15460 15,700 240 F
Fixed selling expense 22920 23,400 480 F
Operating Income 235420 242,600 7,180 unfav
Other fixed expenses 1460 1,300 160 U
Interest expense 710 800 90 F
Net income 233,250 240,500 7,250 unfav
We calculate the actual amounts from the budgeted amount by adding the variances when they are unfavorable and subtracting them when they are favorable . But in case of sales this is reversed. The actual sales are calculated by subtracting unfavorable variance from budgeted sales.
The fav amounts are subtracted from the unfav amounts to get the results .
8,600 u + ( 4,600)F + 2,100 U +1,800= 7,900 unfav
