Great Bubbles, Inc., produces multicoloured bubble solution used for weddings and other events. The company's flexible budget income statement for January follows. It is based on expected sales volume of 65,000 bubble kits. (Click the icon to view the flexible budget income statement.) The company sold 70,000 bubble kits during January, and its actual operating income was as follows: (Click the icon to view the actual income statement.) Requirements Requirement 1. Prepare an income statement performance report for January. Base your calculations on expected sales volume of 65,000 bubble kits. (Enter results as positive numbers. For accounts with a zero balance, make sure to enter "O" in the appropriate column. Label each variance as favourable (F) or unfavourable (U) unless the variance is zero, then do not select a label.) Great Bubbles, Inc. Income Statement Performance Report Month Ended January 31 Actual Results at Actual Prices Flexible Budget Variance Flexible Budget for Actual Number of Output Units Sales Volume Variance Static (Master) Budget Output units Sales revenue Variable expenses: Cost of goods sold Sales commissions expense Utilities expense Fixed expenses: 00 000 400000 Salary expense Depreciation expense Rent expense U VUIII Utilities expense Total expenses Operating income Requirement 2. What accounts for most of the difference between actual operating income and static budget operating income? The for operating income is larger than the V. Most of the difference between static budget operating income and actual operating income resulted from bubble kits than expected. Requirement 3. What is Great Bubbles' static budget variance? Explain why the income statement performance report provides Great Bubbles' managers with more useful information than the simple static budget variance. What insights can Great Bubbles' managers draw from this performance report? Great Bubbles' static budget variance is meaning that its operating income is than expected per the static budget. Choose two explanations why the income statement performance report provides Great Bubbles' managers with more information than the simple static budget variance. These variances suggest that the marketing department did a job by selling kits than expected, at a sale price than expected. Great Bubbles, Inc., produces multicoloured bubble solution used for weddings and other events. The company's flexible budget income statement for January follows. It is based on expected sales volume of 65,000 bubble kits. (Click the icon to view the flexible budget income statement.) The company sold 70,000 bubble kits during January, and its actual operating income was as follows: (Click the icon to view the actual income statement.) Requirements i Data Table i Data Table - X Sales revenue Variable expenses: Cost of goods sold Sales commissions expense Utilities expense Fixed expenses: Salary expense Depreciation expense Rent expense Great Bubbles, Inc. Income Statement Month Ended January 31 Sales revenue $ 211,500 Great Bubbles, Inc. Flexible Budget Income Statement Month Ended January 31 Flexible Budget per Output Unit Output Units (Kits) 65,000 70,000 75,000 $ 188,500 $ 203,000 $ 217,500 Variable expenses $ Cost of goods sold Sales commissions 87,900 23,000 3,500 Utilities expense Utilities expense Total expenses Sales revenue Operating income Variable expenses: 81,250 1.25 0.30 Requirement 2. What accounts for most of the The Cost of goods sold Sales commissions Utilities expense Fixed expenses: Fixed expenses Salary expense Depreciation expense Rent expense Utilities expense 87,500 21,000 3,500 19,500 3,250 93,750 22,500 3,750 hce betwee 32,300 20,000 7,550 6,000 180,250 31,250 0.05 ited from What insights ca Requirement 3. What is Great Bubbles' static managers Total expenses Great Bubbles' static budget variance is $ || $ Operating income Salary expense Depreciation expense Rent expense Choose two explanations why the income state ble static bu 30,000 20,000 8,000 6,000 168,000 20,500 $ 30,000 20,000 8,000 6,000 176,000 27,000 $ 33,000 23,000 12,000 6,000 194,000 23,500 Print Done Utilities expense Total expenses Operating income These variances suggest that the marketing del $ pected