AllNet Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 7,000, 8,500, and 10,500 units. The static budget was based on expected sales of 8,500 units. The company sold 10,500 units during July. Its flexible budget and actual operating income was as follows: (Click the icon to view the flexible budget.) (Click the icon to view the income statement.) Read the requirements Requirement 1. Prepare a flexible budget performance report for July. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F/Unfavorable (U) input blank.) AllNet Technologies Flexible Budget Performance Report For the Month Ended July 31, 2018 2 3 1 4 5 (3) - (5) Sales Budget Amounts Per Unit (1)-(3) Flexible Budget Variance Volume Actual Results Flexible Budget Static Budget Variance Units Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income AllNet Technologies Flexible Budget For the Month Ended July 31, 2018 Budget Amount per Unit 7,000 20 $ 140,000 $ 77,000 Units 8,500 10,500 Sales Revenue $ 170,000 $ 93,500 210,000 115,500 11 Variable Expenses Contribution Margin Fixed Expenses 63,000 52,000 76,500 52,000 94,500 52,000 $ 11,000 $ 24,500 $ 42,500 Operating Income AllNet Technologies Income Statement For the Month Ended July 31, 2018 Sales Revenue $ 217,000 Variable Expenses 120,500 Contribution Margin 96,500 Fixed Expenses 53,500 $ Operating Income 43,000 Requirement 2. What was the effect on AllNet's operating income of selling 2,000 units more than the static budget level of sales? Selling 2,000 units more than the static budget level of sales AllNet's operating income by $ Requirement 3. What is AllNet's static budget variance for operating income? meaning that its operating income is than expected AllNet's static budget variance is $ per the static budget. Requirement 4. Explain why the flexible budget performance report provides more useful information to AllNet's managers than the simple static budget variance. What insights can AllNet's managers draw from this performance report? Choose two reasons why the flexible budget performance report provides AllNet's managers with more information than the simple static budget variance. These variances suggest that the marketing department did a job. They sold units than expected and sold them at a V price than expected
