Problem:
1. The May 2009 income statement for Trajan Inc. is shown below:
| |
Actual
|
Static Budget
|
|
Units sold
|
110
|
100
|
|
Sales
|
$3,200
|
$3,000
|
|
Variable expenses
|
$1,920
|
$1,800
|
|
Contribution margin
|
$1,280
|
$1,200
|
|
Fixed expenses
|
$680
|
$700
|
|
Operating income
|
$600
|
$600
|
Required:
a) Determine what the operating income should have been for the actual units sold.
b) Reconcile the difference between static budget and actual operating income.