9. Answer the following questions:

a. What is the Flex budget variance for operating income? $_____________ F or U?

b. What is the Volume variance for operating income? $____________F or U?

c. Does the combination of the flex budget variance and volume variance sum to the master budget variance for operating income? Y or N? Should it always sum to the master budget variance? Y or N?

d. How much of the master budget variance for Sales revenue was caused by an unanticipated increase in volume?__________________ F or U?

e. How much of the master budget variance for Commissions Exp. was caused by an unanticipated increase in volume?__________________ F or U?

f. How much of the master budget variance for Advertising Expenses was caused by an unanticipated increase in volume?__________________ F or U?

g. How much of the master budget variance for CGS was caused by some factor other than volume? (Hint: this is NOT a manufacturing business). $__________ F or U? What could account for this variance?

Flexible Budget Performanc Actual Flexible Budger Master Budget Volume 21460 21460 20000 Sales Revenue 1131020 1073000 1000000 Less: Variable Expense COGS 682880 643800 600000 Sales Commission 58685 53650 50000 44213 Shipping Expenses Bad debt Expense 42920 40000 16930 9657 9000 328312 Contribution 322973 301000 Less: Fixed Cost 43000 40000 Salaries 40000 Lease on Dost Center 15500 17000 17000 12000 12000 12000 Deprec on equipment Advertising Office Rent, phone 7750 10000 10000 12300 11000 11000 232973 Operating Income 237762 211000