Everlasting Bubbles, Inc. produces multicolored bubble solution used for weddings and other events. The company sold 70,000 bubble kits during August, and its actual operating income was as follows: (Click the icon to view the actual income statement.) The company's flexible budget income statement for August follows: (Click the icon to view the flexible budget income statement.) Read the requirements. Output units Sales revenue Variable expenses: Cost of goods sold Sales commissions expense Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense Utility expense Total expenses Onerating income Income Statement Performance Report For the month ended August 31 Actual Flexible Budget Variance Flexible Volume Master Budget Variance Budget Total expenses Operating income Requirement 2. What accounts for most of the difference between actual operating income and master budget operating income? The for operating income is larger than the Most of the difference between master budget operating income and actual operating income resulted from bubble kits than expected. Requirement 3. What is Everlasting Bubbles' master budget variance for operating income? Explain why the income statement performance report provides Everlasting Bubbles' managers with more useful information than the simple master budget variance. What insights can Everlasting Bubbles' managers draw from this performance report? Everlasting Bubbles' master budget variance for operating income is than expected. This means that operating income is Choose two reasons why the income statement performance report provides Everlasting 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 Flexible Budget Income Statement Month Ended August 31 Flexible Budget per Output Unit 65,000 Output Units (Kits) 70,000 75,000 $ 198,250 $ 213,500 $ 228,750 Sales revenue $ 3.05 Variable expenses: Cost of goods sold 1.25 81,250 87,500 93,750 Sales commissions 0.15 9,750 10,500 11,250 Utility expense 0.20 13,000 14,000 15,000 Fixed expenses: Salary expense Depreciation expense Rent expense 30,000 30,000 33,000 20,000 20,000 23,000 10,000 10,000 16,000 Utility expense Total expenses 5,000 5,000 5,000 $ 169,000 $ 177,000 $ 197,000 $ 29,250 $ 36,500 $ 31,750 Operating income Data table Everlasting Bubbles, Inc. Income Statement Month Ended August 31 $ 220,000 Sales revenue Variable expenses: Cost of goods sold $ 87,750 Sales commissions 12,750 Utility expense 14,000 Fixed expenses: Salary expense 32,300 Depreciation expense 20,000 Rent expense 9,550 5,000 Utility expense $ 181,350 Total expenses $ 38,650 Operating income