10, P10-49A (similar to) Homework: Homework Chapter Ten Part 1 of 6 HW Score: 26.11%, 5.74 of 22 points O Points: 0 of 3 Save Next question Precious Bubbles, Inc., produces multicolored bubble solution used for weddings and other events. (Click the icon to view the master budget income statement.) Precious Bubbles' plant capacity is 62,500 kits. If actual volume exceeds 62,500 kits, the company must expand the plant. In that case, salaries will increase by 10%, depreciation by 15%, and rent by $4,000. Fixed utilities will be unchanged by any volume increase. Requirements 1. Prepare flexible budget income statements for the company, showing output levels of 55,000, 60,000, and 65,000 kits. 2. Graph the behavior of the company's total costs. Use total costs on the y-axis and volume (in thousands of bubble kits) on the x-axis. 3. Why might Precious Bubbles' managers want to see the graph you prepared in Requirement 2 as well as the columnar format analysis in Requirement 1? What is the disadvantage of the graphic approach? Requirement 1. Prepare flexible budget income statements for the company, showing output levels of 55,000, 60,000, and 65,000 kits. (Enter the per unit information to two decimal places.) Precious Bubbles, Inc. Flexible Budget Income Statement Month Ended March 31 Flexible Budget ner Output SO sta all W na m Data table Next question The company's master budget income statement for March follows. It is based on expected sales volume of 55,000 bubble kits. Precious Bubbles, Inc. Master Budget Income Statement Month Ended March 31 Sales revenue Variable expenses: Cost of goods sold Sales commissions 3, es Utility expense Fixed expenses: 0 cl $ 165,000 Print Done 68,750 13,750 5,500 Data table Next question Variable expenses: Cost of goods sold 68,750 Sales commissions 13,750 Utility expense 5,500 Fixed expenses: Salary expense 30,000 Depreciation expense 20,000 Rent expense 6,000 7,000 Utility expense 151,000 Total expenses $ 14,000 Operating income Print Done Question 10, P10-49A (similar to) = Homework: Homework Chapter Ten Part 1 of 6 HW Score: 26.11%, 5.74 of 22 points Points: 0 of 3 Save Next question Precious Bubbles, Inc., produces multicolored bubble solution used for weddings and other Requirements Requirement 1. Prepare flexible budget income statements for the company, showing output levels of 55,000, 60,000, and 65,000 kits. (Enter the per unit information to two decimal places.) Precious Bubbles, Inc. Flexible Budget Income Statement Month Ended March 31 Flexible Budget per Output Sales revenue Variable expenses: Cost of goods sold Unit 55,000 Output Units (Kits) 60,000 65,000 Sales revenue Variable expenses: Cost of goods sold Sales commissions Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense Utility expense Total expenses Operating income