= Homework: Chapter 10 Homework Question 7, E10-27A (SI... Part 2 of 8 HW Score: 85.61%, 21.4 of 25 points Score: 2.16 of 4 Save The Creative Balloon Company produces party balloons that are sold in multi-pack cases. Following is the company's performance report in contribution margin format for July B3 (Click the icon to view the performance report in contribution margin format.) Red Data Table - X Requirements Red . A B D The 1 The Creative Balloon Company Red 2. Actual vs. Budget Performance Report 3 For the Month Ended July 31 The Master Budget Master Budget Variance Actual Sales volume (number of cases 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.) 5. 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 questions, using the actual sales volume of 56 500 units and the budgeted sales volume of 53,000 units. Use the original budget assumptions for sales price, varjable cost per unit and fixed costs, assuming the relevant range stretches from 48,000 to 71,500 units 6. Using the flexible budget performance report you prepared for Requirement 5, answer the following questions How much of the master budget variance (calculated in Requirement 4) for operating income is due to volume being higher than expected? b. How much of the master budget variance for variable expenses is due to some cause other than volume? 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? 5 sold) 56,500 53.000 6 Sales revenue $ 191,600 $ 169.600 7 Less: Variable expenses 68.800 58.300 a. 8 Contribution margin $ 122.800 $ 111.300 9 Less: Fixed expenses 71 800 71.000 5 51.000 5 40.300 c. 10 Operating income Entd Part 2 of 8 Score: 2.16 of 4 ing is the company's performance report in contribution margin format for July Data Table - B D 1 2 The Creative Balloon Company Actual vs. Budget Performance Report For the Month Ended July 31 avorable (F) or 3 Master Budget Variance e that is (a) due to nexpected cause ng the actual sales ne original budget the relevant range Master Budget 4 Actual Sales volume (number of cases 56,500 53,000 5 sold) 6 Sales revenue 5 answer the following | $ 191 6005 169,600 68.800 58.300 $ 122,800 $ 111.300 171.800 72 000 7 Less: Variable expenses 8 contribution margin for operating income is to some cause other 9 Less: Fixed expenses 10 Operating income $ 51 000 $ 40.300 2