9, E10-27A (similar to) ||| = Homework: Homework Chapter Ten Part 4 of 8 HW Score: 26.76%, 5.89 of 22 points Points: 0.14 of 3 Save The Precious Balloon Company produces party balloons that are sold in multi-pack cases. Following is the company's performance report in contribution margin format for August: | (Click the icon to view the performance report in contribution margin format.) Read the requirements. The budgeted sales price per unit is 3.30 Requirement 2. What is the budgeted variable expense per unit? The budgeted variable expense per unit is 1.20 ... Requirement 3. What is the budgeted fixed cost for the period? The budgeted fixed cost for the period is $ 69,000 Requirements 4 and 5. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U.) Management would like to determine the portion of the master budget variance that is (a) due to volume being different than originally anticipated, and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these questions, using the actual sales volume of 60,500 units and the budgeted sales volume of 55,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 50,000 to 75,500 units. Data table 1 2 3 The Precious Balloon Company Actual vs. Budget Performance Report For the Month Ended August 31 Master Actual Budget Master Budget Variance Sales volume (number of cases 5 sold) 60,500 55,000 6 Sales revenue $ 206,500 $ 181,500 7 Less: Variable expenses 76,000 66,000 8 Contribution margin 9 Less: Fixed expenses 10 Operating income $ 130,500 $ 115,500 70,500 69,000 $ 60,000 $ 46,500 Print Done Requirements 4. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U.) 5. Management would like to determine the portion of the master budget variance that is (a) due to volume being different than originally anticipated and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these questions, using the actual sales volume of 60,500 units and the budgeted sales volume of 55,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 50,000 to 75,500 units. 6. Using the flexible budget performance report you prepared for Requirement 5, answer the following questions: a. How much of the master budget variance (calculated in Requirement 4) for operating income is due to volume being higher than expected? b. How much of the master budget variance for variable expenses is due to some cause other than volume? C. d. What could account for the flexible budget variance for sales revenue? What is the volume variance for fixed expenses? Why is it this amount? Print Done The Precious Balloon Company produces party balloons that are sold in multi-pack cases. Following is the company's performance report in contribution margin format for August: The Precious Balloon Company Flexible Budget Performance Report For the Month Ended August 31 Flexible Master Actual Budget Variance Flexible Volume Master Budget Budget Variance Budget Variance 60,500 Sales volume Sales revenue 206,500 FF 55,000 $ 181,500 76,000 Less: Variable expenses 66,000 Contribution margin 130,500 LL 115,500 70,500 Less: Fixed expenses 1,500 U 69,000 60,000 46,500 Operating income F