Data Table X Blowing Bubbles, Inc. Income Statement Month Ended July 31 $ 187,500 $ Sales revenue Variable expenses: Cost of goods sold Sales commissions Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense 75,400 16,000 6,000 32,200 20,000 5,350 7,000 Utility expense x Data Table Blowing Bubbles, Inc. Flexible Budget Income Statement Month Ended July 31 Flexible Budget per Output Unit Output Units (Kits) 55,000 60,000 65,000 Sales revenue 3.00 $ 165,000 $ 180,000 $ 195,000 Variable expenses: Cost of goods sold 1.25 68,750 75,000 81,250 Sales commissions 0.25 13,750 15,000 16,250 Utility expense 0.10 5,500 6,000 6,500 Requirement 1. Prepare the income statement performance report. Note: The master budget was based on expected sales volume of 55,000 bubble kits. (For accounts with a 0 balance, make sure to enter "0" in the appropriate column. Label each variance as favorable (F) or unfavorable (U). A variance of zero is considered favorable.) Blowing Bubbles, Inc. Income Statement Performance Report For the month ended July 31 Actual Flexible Volume Master Flexible Budget Variance Budget Variance Budget Output units Sales revenue Variable expenses: Fixed expenses: Salary expense Depreciation expense Rent expense Utility expense Total expenses Operating income Requirement 2. What accounts for most of the difference between actual operating income and master budget operating income? The V. Most of the difference between master budget operating income and actual operating income resulted from for operating income is larger than the v bubble kits than expected Requirement 3. What is Blowing Bubbles' master budget variance? Explain why the income statement performance report provides Blowing Bubbles' managers with more useful information than the simple master budget variance. What insights can Blowing Bubbles' managers draw from this performance report? meaning that its operating income is Blowing Bubbles' master budget variance is $ than expected. Choose two reasons why the income statement performance report provides Blowing Bubbles' managers with more information than the simple master budget variance. These variances suggest that the marketing department did a job by selling kits than expected, at a sale price than expected. Data Table X Blowing Bubbles, Inc. Income Statement Month Ended July 31 $ 187,500 $ Sales revenue Variable expenses: Cost of goods sold Sales commissions Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense 75,400 16,000 6,000 32,200 20,000 5,350 7,000 Utility expense x Data Table Blowing Bubbles, Inc. Flexible Budget Income Statement Month Ended July 31 Flexible Budget per Output Unit Output Units (Kits) 55,000 60,000 65,000 Sales revenue 3.00 $ 165,000 $ 180,000 $ 195,000 Variable expenses: Cost of goods sold 1.25 68,750 75,000 81,250 Sales commissions 0.25 13,750 15,000 16,250 Utility expense 0.10 5,500 6,000 6,500 Requirement 1. Prepare the income statement performance report. Note: The master budget was based on expected sales volume of 55,000 bubble kits. (For accounts with a 0 balance, make sure to enter "0" in the appropriate column. Label each variance as favorable (F) or unfavorable (U). A variance of zero is considered favorable.) Blowing Bubbles, Inc. Income Statement Performance Report For the month ended July 31 Actual Flexible Volume Master Flexible Budget Variance Budget Variance Budget Output units Sales revenue Variable expenses: Fixed expenses: Salary expense Depreciation expense Rent expense Utility expense Total expenses Operating income Requirement 2. What accounts for most of the difference between actual operating income and master budget operating income? The V. Most of the difference between master budget operating income and actual operating income resulted from for operating income is larger than the v bubble kits than expected Requirement 3. What is Blowing Bubbles' master budget variance? Explain why the income statement performance report provides Blowing Bubbles' managers with more useful information than the simple master budget variance. What insights can Blowing Bubbles' managers draw from this performance report? meaning that its operating income is Blowing Bubbles' master budget variance is $ than expected. Choose two reasons why the income statement performance report provides Blowing Bubbles' managers with more information than the simple master budget variance. These variances suggest that the marketing department did a job by selling kits than expected, at a sale price than expected