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Magnet Technologies manufactures refrigerator magnets for companies as promotional items. The company's July 2019 Flexible Budget shows output levels of 3,000, 5,000 and 7,000 units. The static budget was based on 5,000 units Budget Formula Units 3,000 $120,000 $57,000 $63,000 $32,000 5,000 $200,000 $95,000 $105,000 $32,000 $73,000 7,000 $280,000 $133,000 $147,000 $32,000 $115,000 $40 $19 Sales Variable Expenses Contribution Margin Fixed Expenses $31,000 Net Income The company sold 7,000 units and it's actual results are as follows: $297,000 $151,000 $146,000 $34,000 $112,000 Sales Variable Expenses Contribution Margin Fixed Expenses Net Income Required: 1. Prepare the Flexible Budget Performance Report 2. What is the effect on net income on Magnet Technologies from selling more units that the Master Budget anticipated? 3. Why are flexible budget reports useful to managers? Magnet TechinvIogres Flexible Budget Performance Report Month Ended July 31, 2019 Flexible Budget Sales Volume Static (Master) Flexible Budget Fav/Unfav Fav/Unfav Budget Formula Actual Results Variance Variance Budget Units Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income 2 3