Flowing Bubbles, Inc., produces multicolored bubble solution used for weddings and other events. (Click the icon to view the master budget income statement.) Flowing Bubbles' plant capacity is 62,500 kils. If actual volume exceeds 62,500 kits, the company must expand the plant. In that case, salaries will increase by 10%, depreciation by 15%, and rent by $4.000. Fixed utilities will be unchanged by any volume increase Requirements 1. Prepare flexible budget income statements for the company, showing output levels of 55,000, 60,000, and 85.000 kits. 2. Graph the behavior of the company's total costs. Use total costs on the y-axis and volume (in thousands of bubble kils) on the x-axis. Flowing Bubbles, Inc. Flexible Budget Income Statement Month Ended January 31 Flexible - X Data table Budget per Output Unit Output Units (Kits) 60,000 65.000 The company's master budget Income statement for January follows. It is based on expected sales volume of 55,000 bubble kits. 55,000 Sales revenue Variable expenses: Cost of goods sold Sales commissions Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense Flowing Bubbles, Inc. Master Budget Income Statement Month Ended January 31 $ Sales revenue 159,500 Variable expenses: Cost of goods sold $ 68,750 Sales commissions 11,000 Utility expense 8,250 Fixed expenses: Salary expense 30,000 Depreciation expense 20,000 Rent expense 11,000 Utility expense 6,000 $ 155,000 Total expenses $ 4,500 Operating income Utility expense Total expenses Operating Income Help me solve this Video Get more help Clear all Check