#4. Magnet Technologies manufactures refrigerator magnets for companies as promotional items. The company's July 2019 Flexible Budget shows output levels of 3,000, 5,000 and 7,000 units. The static budget was based on 5,000 units Budget Formula 3,000 $120,000 $57,000 $63,000 $32,000 $31,000 5,000 $200,000 $95,000 Units 7,000 $280,000 $133,000 $147,000 $32,000 $115,000 Sales $40 Variable Expenses $19 Contribution Margin Fixed Expenses $105,000 $32,000 $73,000 Net Income The company sold 7,000 units and it's actual results are as follows: Sales $297,000 Variable Expenses $151,000 Contribution Margin $146,000 Fixed Expenses $34,000 $112,000 Net Income Required: 1. Prepare the Flexible Budget Performance Report 2. What is the effect on net income on Magnet Technologies from selling more units that the Master Budget anticipated? 3. Why are flexible budget reports useful to managers? Flexible Budget Static (Master) Sales Volume Flexible Budget udget Budget Formula Actual Results Variance Fav/Unfav Variance Fav/Unfav Units Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income