Capacity is 62,500 knits, if aqctual volume exceeds 62,500 knits company must expand the plant, if so salaries will increase by 10%,depreciation by 15% and rent by $4,000. utilities will be unchanged

Objective 2) Refer to the Outrageous Bubbles data in P10-43A. The company sold 60,000 bubble kits during March, and its actual operating income was as follows: OUTRAGEOUS BUBBLES, INC. Income Statement Month Ended March 31 $194,000 Sales revenue Variable expenses: Cost of goods sold 75,500 16,500 6,000 Sales commissions..cccccacene Utility expense Salary expense. Rent expense. Fixed expenses: 32,200 Depreciation expense20,000 14,550 7,000 . S171,750 S 22,250 Uriliry expense Total expenses.. Requirements 1. Prepare an income statement performance report for March. 2. What accounts for most of the difference between actual operating income and master budget operating income? 3. What is Outrageous Bubbles master budget variance for operating income? Explain why the income statement performance report provides Outrageous Bubbles' managers with more useful information than the simple master budget variance. What insights can Outrageous Bubbles managers draw from this performance report