Tropical Shelters, a pavilion installation company, is trying to prepare their financial statements for the year. The company uses variable costing to track all expenses, in an effort to maintain competitive prices. However, the bank requires Tropical Shelters to submit audited financial statements in accordance with GAAP in order to continue receiving funding. Tropical Shelters has the following information regarding their work for the period:
Pavilions in Process at the beginning of the month: $77,000 (24 partially completed pools, with $45,000 of fixed overhead costs applied).
Pavilions in Process at the end of the month: $82,000 (26 partially completed pools, with $36,000 of fixed overhead costs applied)
Tropical Shelters prepared the following variable costing income statement for the month:
What is the amount of net operating income or loss that Tropical Shelters will have to report to the bank on their audited financial statements?

Question

Tropical Shelters, a pavilion installation company, is trying to prepare their financial statements for the year. The company uses variable costing to track all expenses, in an effort to maintain competitive prices. However, the bank requires Tropical Shelters to submit audited financial statements in accordance with GAAP in order to continue receiving funding. Tropical Shelters has the following information regarding their work for the period:
Pavilions in Process at the beginning of the month: $77,000 (24 partially completed pools, with $45,000 of fixed overhead costs applied).
Pavilions in Process at the end of the month: $82,000 (26 partially completed pools, with $36,000 of fixed overhead costs applied)
Tropical Shelters prepared the following variable costing income statement for the month:
  What is the amount of net operating income or loss that Tropical Shelters will have to report to the bank on their audited financial statements?

Quizplus · Accepted Answer

The Answer of Tropical Shelters, a pavilion installation company, is trying to prepare their financial statements for the year. The company uses variable costing to track all expenses, in an effort to maintain competitive prices. However, the bank requires Tropical Shelters to submit audited financial statements in accordance with GAAP in order to continue receiving funding. Tropical Shelters has the following information regarding their work for the period:
Pavilions in Process at the beginning of the month: $77,000 (24 partially completed pools, with $45,000 of fixed overhead costs applied).
Pavilions in Process at the end of the month: $82,000 (26 partially completed pools, with $36,000 of fixed overhead costs applied)
Tropical Shelters prepared the following variable costing income statement for the month:
  What is the amount of net operating income or loss that Tropical Shelters will have to report to the bank on their audited financial statements?

Tropical Shelters, a Pavilion Installation Company, Is Trying to Prepare