Home Resorts, a Residential Pool Installation Company, Is Trying to Prepare

Essay

Home Resorts, a residential pool 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 Home Resorts to submit audited financial statements in accordance with GAAP in order to continue receiving funding.
Home Resorts has the following information regarding their work for the period:
Pools in Process at the beginning of the month: $84,000 (14 partially completed pools, with $40,000 of fixed overhead costs applied).
Pools in Process at the end of the month: $90,000 (15 partially completed pools, with $24,000 of fixed overhead costs applied)
Home Resorts prepared the following variable costing income statement for the month:
What is the amount of net operating income or loss that Home Resorts will have to report to the bank on their audited financial statements?