Answer the following questions(dollar amount;F or U?; Reason, when asked)

1. What is the flex budget variance for operating income?
2. What is the volume variance for operating income?
3. What do the flex budget variance and volume variance for operating income sum to? Does this equal the total master budget varianceYes or No? Should it always sum (or net)to the total master budget variance, even if one is U and one is F?Yes or No?
4. How much of the master budget variance for Sales was caused by an UNANTICIPATED increase in volume?
5. How much of the master budget variance for Commission Expense was caused by an UNANTICIPATED increase in volume?
6. How much of the master budget variance for Advertising Expense was caused by an UNANTICIPATED increase in volume?
7. How much of the master budget variance for CGS was caused by some factor OTHER THAN volume?
8. What could account for this variance?
9. How much of the master budget variance for Sales Revenue was caused by some factor OTHER THAN volume?
10. What could account for this variance?
11. How much of the master budget variance for Advertising Expense was caused by some factor OTHER THAN volume?
12. What could account for this variance?

2 Budget assumptions: 3 4 Volume 5 Sales Revenue 6 Percent sold on credit 7 8 Variable Expenses: 9 CGS 10 Sales Commission 20,000 cases 50.00 per case 90% percent of sales Volume (in cases) Kelsey's Frozen Confectionaries Master Budget Performance Report For the month ended June 30 ACTUAL 21,460 MASTER BUDGET 20,000 VARIANCE VAR.% For U 1,460 7.3% F S 30.00 per case Sales Revenue $ 1,131,020 $1,000,000.00 $ 131,020.00 13.1% F $ 2.50 per case Less Variable Expenses: 11 Shipping Expense S 2.00 per case Cost of Goods Sold $ 682,880 $ 600,000.00 $ 82,880.00 13.8% U 12 Bad Debt Expense 1.00% percent of credit sales Sales Commissions 58,685 $ 50,000.00 $ 8,685.00 17.4% U 13 Shipping Expense $ 44,213 $ 40,000.00 $ 4,213.00 10.5% U 14 Fixed Monthly Expenses: Bad debt expense $ 16,930 $ 15 Salaries $ 40,000 Contribution Margin $ 328,312 $ 9,000.00 $ 7,930.00 301,000.00 $ 27,312.00 88.1% U 9.1% F 16 Lease on Distribution center $ 17,000 Less Fixed Expenses: 17 Depreciation on fleet & Equip $ 12,000 Salaries $ 43,000 $ 18 Advertising 19 Office rent, phone, internet 20 21 Management by exception $ 10,000 Lease on Distn center 15,500 $ 40,000 $ 17,000 $ (1,500.00) 3,000.00 7.5% U -8.8% F $ 11,000 Deprec. on fleet/equip 12,000 $ 12,000 $ 0.0% F Advertising 7,750 $ 10,000 $ (2,250.00) -22.5% F 15% Investigation rule Office rent, phone, net 12,300 $ 11,000 $ 1,300.00 11.8% U 22 23 HINTS on EXCEL: Operating Income 237,762 $ 211,000 $ 26,762.00 12.7% F