Great Bubbles, Inc. produces multicolored bubble solution used for weddings and other events. The company sold 50,000 bubble kits during October, 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 October follows: (Click the icon to view the flexible budget income statement.) Requirements 1. Prepare an income statement performance report for October. Note: The master budget was based on expected sales volume of 45,000 bubble kits. 2. What accounts for most of the difference between actual operating income and master budget operating income? 3. What is Great Bubbles' master budget variance for operating income? Explain why the income statement performance report provides Great Bubbles' managers with more useful information than the simple master budget variance. What insights can Great Bubbles' managers draw from this performance report? fra loni our blume of 45,000 bubble kits. (For ble (U). A variance of zero is considered 762 DO Print Done or et Data table Data table Great Bubbles, Inc. Income Statement Month Ended October 31 $ Sales revenue.. 160,000 Great Bubbles, Inc. Flexible Budget Income Statement Month Ended October 31 Flexible Budget Variable expenses: Cost of goods sold $ 62,800 Sales commissions 8,000 Utility expense 10,000 Fixed expenses: Sales revenue per Output Unit 45,000 55,000 $ 3.05 $ 137,250 $ 152,500 $167,750 Output Units (Kits) 50,000 Salary expense 32,2001 Variable expenses: Depreciation expense 20,000 Cost of goods sold 1.25 56,250 62,500 68,750 Rent expense 8,950 Sales commissions 0.15 6,750 7,500 8,250 4,000 Utility expense Utility expense 0.20 9,000 10,000 11,000 Total expenses Operating income 145,950 14,050 Fixed expenses: Salary expense Depreciation expense 30,000 30,000 33,000 20,000 20,000 23,000 Print Done Print Done Time Remaining: 02:29:22 Output units Sales revenue Variable expenses: Cost of goods sold Sales commissions expense Utility expense Fixed expenses: Salary expense Income Statement Performance Report For the month ended October 31 Actual Flexible Budget Flexible Volume Master Variance Budget Variance Budget 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 Most of the difference between master bubble kits than expected. for operating income is larger than the budget operating income and actual operating income resulted from Requirement 3. What is Great Bubbles' master budget variance for operating income? Explain why the income statement performance report provides Great Bubbles' managers with more useful information than the simple master budget variance. What insights can Great Bubbles' managers draw from this performance report? Requirement 2. What accounts for most of the difference between actual operating income and master budget operating income? for operating income is larger than the The Most of the difference between master bubble kits than expected. budget operating income and actual operating income resulted from Requirement 3. What is Great Bubbles' master budget variance for operating income? Explain why the income statement performance report provides Great Bubbles managers with more useful information than the simple master budget variance. What insights can Great Bubbles' managers draw from this performance report? Great Bubbles' master budget variance for operating income is This means that operating income is than expected Choose two reasons why the income statement performance report provides Great 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. Requirement 2. What accounts for most of the difference between actual operating income and The budg for operating income is larger than the e resulted from bubbl Requ mana favorable flexible budget variance Grea favorable volume variance Choc et variance for operating income? Explain w le master budget variance. What insights ca income is unfavorable flexible budget variance unfavorable volume variance rmance report provides Great Bubbles' mana 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 budget operating income and actual operating income resulted from Requirement 3. What is Great Bubbles' master budget variance for operating inco managers with more useful information than the simple master budget variance. W Great Bubbles' master budget variance for operating income is than expected. Choose two reasons why the income statement performance report provides Great Most of the difference between master favorable flexible budget variance ance report provides Great But from this performance report? favorable volume variance unfavorable flexible budget variance the simple master budget varia unfavorable volume variance These variances suggest that the marketing department did a job by selling kits than expected, at a sale price than expected. Requirement 2. What accounts for most of the difference between actual operating income and master budget oper The for operating income is larger than the budget operating income and actual operating income resulted from bubble kits than expected Requirement 3. What is Great Bubbles' master budget variance for managers with more useful information than the simple master budge the income state reat Bubbles' m Great Bubbles' master budget variance for operating income is selling 5,000 less means that ope than expected. selling 5,000 more Choose two reasons why the income statement performance report p ers with more info selling 50,000 less selling 50,000 more These variances suggest that the marketing department did a job by selling kits than expected, at a Read the requirements. Requirement 2. What accounts for most of the difference between actual operating income and master budget operat The for operating income is larger than the budget operating income and actual operating income resulted from bubble kits than expected. Requirement 3. What is Great Bubbles' master budget variance for operating income? Explain why the income statem managers with more useful information than the simple master budget variance. 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Explain why the income statement performance repo managers with more useful information than the simple master budget variance. What insights can Great Bubbles' managers draw from this Great Bubbles' master budget variance for operating income is This means that operatina income le than expected. Choose two reasons why the income statement performance report provides Great Bubbles' managers with more inf simpli higher lower These variances suggest that the marketing department did a job by selling kits than expected, at a sale price than Great Bubbles, Inc. produces multicolored bubble solution used for weddings and other events. The company sold 50,000 bubble kits during October, 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 October follows: (Click the icon to view the flexible budget income statement.) Read the requirements Requirement 1. Prepare the income statement performance report. Note: The master budget was based on expected sales volume of 45,000 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.) Great Bubbles, Inc. Income Statement Performance Report For the month ended October 31 Output units i Sales revenue Variable expenses Cost of goods sold Actual Flexible Budget Variance Flexible Budget Volume Master Variance Budget Data table Budget per Output Unit 45,000 Output Units (Kits) 50,000 55,000 $ $ 137,250 $ 152,500 $ 167,750 3.05 I < ng Sales revenue Variable expenses: Cost of goods sold 1.25 56,250 62,500 68,750 Sales commissions 0.15 6,750 7,500 8,250 000 ariam Utility expense 0.20 9,000 10,000 11,000 Fixed expenses: Salary expense Depreciation expense Rent expense Utility expense Total expenses Operating income 30,000 30,000 33,000 20,000 20,000 23,000 10,000 10,000 15,000 4,000 4,000 4,000 $ 136,000 $ 144,000 $ 163,000 1,250 $ 8,500 $ 4,750