9. Answer the following questions: a. What is the total revenue/spending variance for operating income? $_____________ F or U? b. What is the Activity variance for operating income? $____________F or U? c. Does the combination of the revenue/spending variance and activity 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 Cost of Goods Sold was caused by an unanticipated increase in volume?__________________ F or U? e. How much of the master budget variance for Shipping Exp. was caused by an unanticipated increase in volume?_____ ____________ F or U? f. How much of the master budget variance for Salary Expenses was caused by an unanticipated increase in volume?____ F or U? g. How much of the master budget variance for COGS was caused by some factor other than volume? (Hint: this is NOT a manufacturing business). $_________ F or U? What could account for this variance? h. How much of the master budget variance for Sales Revenue was caused by some factor other than volume? $________ F or U? What could account for this variance? i. How much of the master budget variance for Salary Exp. was caused by some factor other than volume? $__________ F or U? What could account for this variance?

Kelsey's Frozen Confectionaries Fexible Budget Performance Report For the month ended June 30 ACTUAL FLEXIBLE BUDGET 20,380 Volume (In Cases) MASTER BUDGET 18,000 20,380 $ 1,137,630 $ 1,120,900 990,000 $ $ $ $ $ 685,970 60,000 43,215 15,930 332,515 $ $ $ $ $ 713,300 50,950 40,760 15,973 299,917 630,000 45,000 36,000 14,108 264,893 Sales Revenue Less: Variable Expenses Costs of Goods Sold Sales Commissions Shipping Expenses Bad Debt Expenses Contribution Margin Less: Fixed Expenses Salaries Lease on Distribution Center Depreciation on fleet and Equipment Advertising Office rent, phone, internet Operating Income $ $ $ $ $ $ 46,000 15,500 10,000 8,750 12,300 239,965 $ $ $ $ $ $ 45,000 23,000 10,000 13,000 10,000 198,917 45,000 23,000 10,000 13,000 10,000 173,893