financial statements.

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   Expenses:         Wages and salaries ($36,900 + 1.60q) 94,500 4,800 U 89,700   Supplies ($0.90q) 32,400 2,700 U 29,700   Insurance ($13,300) 13,300 0    13,300   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

Evaluate the importance of reading and correctly interpreting budgeted financial statements.