AllNet Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 7,500, 9,000, and 11,000 units. The static budget was based on expected sales of 9,000 units. The company sold 11,000 units during July. Its flexible budget and actual operating income was as follows: (Click the icon to view the flexible budget.) Read the requirements. (Click the icon to view the income statement.) 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 Units Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income 1 2 3 5 (1)-(3) (3)-(5) Budget Flexible Sales Amounts Actual Budget Per Unit Results Variance Flexible Budget Volume Variance Static Budget Data table Units Sales Revenue AllNet Technologies Flexible Budget For the Month Ended July 31, 2018 Budget Amount per Unit 7,500 9,000 11,000 25 $ 187,500 $ 225,000 $275,000 Variable Expenses 15 112,500 135,000 165,000 Contribution Margin 75,000 90,000 110,000 Fixed Expenses 54,000 54,000 54,000 $ 21,000 $ 36,000 $ 56,000 Operating Income Print Done - Data table AllNet Technologies Income Statement For the Month Ended July 31, 2018 Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income $ 282,000 170,200 111,800 55,000 $ 56,800 Print Done - Requirements 1. Prepare a flexible budget performance report for July. 2. What was the effect on AllNet's operating income of selling 2,000 units more than the static budget level of sales? 3. What is AllNet's static budget variance for operating income? 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? Print Done