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I feel confused about this question. P1043A Prepare a budget with different volumes for planning (Learning Objective 5) Outrageous Bubbles, Inc., produces multicolored bubble solution

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P1043A Prepare a budget with different volumes for planning (Learning Objective 5) Outrageous Bubbles, Inc., produces multicolored bubble solution used for weddings and other events. The company's master budget income statement for March follows. It is based on expected sales volume of 55,000 bubble kits. OUTRAGEOUS BUBBLES, INC. Master Budget Income Statement Month Ended March 31 Sales revenue ............ $170,500 Variable expenses: Cost of goods sold . . $ 68,750 Sales commissions ................it; 13,750 Utility expense .............!! .. 5,500 Fixed expenses: Salary expense.. 30,000 Depreciation expense .. 20,000 Rent expense............... 15,000 Utility expense 7,000 Total expenses.. $160,000 Operating income.. . . $ 10,500Outrageous Bubbles' plant capacity is 62,500 kits. 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 exible budget income statements for the company, showing output levels of 55,000, 60,000, and 65,000 kits. 2. Graph the behavior of the company's total costs. Use total costs on the yaxis and volume (in thousands of bubble kits) on the xaxis. 3. Why might Outrageous Bubbles' managers want to see the graph you prepared in Requirement 2 as well as the columnar format analysis in Requirement 1? What is the disadvantage of the graphic approach

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