Trident University International
5757 Plaza Drive, Suite 100
Cypress, CA 90630
MEMO
To: Owner, Serious Reader Company
From: Gabe LeBlanc
Date: August 14, 2016
Subject: Income Statement Assessment
It has been a pleasure to work with Serious Reader Company (SRC) and I am pleased to present to you the 2016 Income Statement (IS). In compliance with your request, the Managerial accounting interpretation of the results and merely in gross margin income, statement was using Variable Costing. The cost classification is based in “all non-manufacturing categories”, direct, indirect and fixed. It also includes the recommended projection on how SRC can adjust its strategies.
By looking at the 2016 statement in three (3) different …show more content…
Be that as it may you have encountered a serious benefit misfortune. From the information that I have accumulated from you records, your class D and E books are not working out quite as well as alternate classifications of books. You had an aggregate loss of $9000 from those two classifications of books. Despite the fact that your salary articulation is demonstrating a higher number of book deals in Category D and E, it is costing you more to buy the books versus offering them.
The second page of your wage proclamation shows results with a little control. Utilizing the same numbers from your unique proclamation, I am ready to demonstrate to you what your pay would look like if 90% of all you book were sold. As should be obvious you benefit would increment massively. You'll encounter a $36,900 benefit increment by simply expanding the deals.
The last page of your pay articulation demonstrates what your benefits would be on the off chance that you did a 50% markup from your unique deals costs. This is the place you can boost your benefits. In view of your unique numbers, you will make $99900. On the off chance that you check up your costs, your D and E classes that were ruining you at first would make them take …show more content…
As long as the statement stays internal, the company can not only see where they are financially, however, they can play with the numbers of the company and see where they could be if they tried something a little different. An internal statement does not follow the rules and guidelines established by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (Lister, n.d), therefore it can things like changes in operating income, cost, assets and profits levels, before the company gives the info to shareholder and the outside