E10-25A Comprehensive flexible budget problem (Learning Objectives 2 & 5) The Happy Balloon Company produces party balloons that are sold in multi-pack cases. follow is the company's performance report in contribution margin format for August: The Happy Balloon Company Actual vs. Budget Performance Report For the Month Ended August 31 4 Master Actual Master Budget Budget Variance 5 7 Sales volume (number of cases sold) 8 Sales revenue 9 Less: Variable expenses 10 Contribution margin 11 Less: Fixed expenses 12 Operating income 13 55,000 165,000 88,000 $85,50077,000 68,000 9,000 60,000 185,000 99,500 69,000 Requirements 1. What is the budgeted sales price per unit? 2. What is the budgeted variable expense per unit? 3. What is the budgeted fixed cost for the period? 4. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U) Management would like to determine the portion of the master budget variance that is (a) due to volume being different than originally anticipated and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these ques- tions, using the actual sales volume of 60,000 units and the budgeted sales volume of 55,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 50,000 to 75,000 units. Using the flexible budget performance report you prepared for Requirement 5, answer the following questions: a. How much of the master budget variance (calculated in Requirement 4) for oper 5. 6. ating income is due to volume being higher than expected? How much of the master budget variance for variable expenses is due to some cause other than volume? b. c What could account for the flexible budget variance for sales revenue? d. What is the volume variance for fixed expenses? Why is it this amount