Master Budget Budget Varianc Master Actual 50,000 $ 191,000 $ 170,000 65,000 $ 117,000 $ 105,000 63,000 $ 53,200 $ 42,000 Sales volume (number of cases sold) 54,500 Sales revenue 74,000 Less: Variable expenses Contribution margin Less: Fixed expenses Operating income 63,800 The Precious Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in contribution margin format for December: EEB (Click the icon to view the performance report in contribution margin format.) Read the requirements. ce re Selling less units than budgeted Selling more units than budgeted Selling units at a higher price than budgeted Selling units at a lower price than budgeted exp ce re Requirement 6c. Using the flexible budget performance report you prepared for Requirement 5, answer the following question: What could account for the flexible budget variance for sales revenue? could account for the flexible budget variance for sales revenue Requirement 6b. Using the flexible budget performance report you prepared for Requirement 5, answer the following question: How much of the master budget variance for variable expenses is due to some cause other than volume? The amount of the master budget variance for variable expenses due to some cause other than volume is$ Requirement 6a. Using the flexible budget performance report you prepared for Requirement 5, answer the following question: How much of the master budget variance (calculated in Requirement 4) for operating income is due to volume being higher than expected? The amount of the master budget variance for operating income due to volume being higher than expected is S Actual Variance Budget Variance Budget Variance Sales volume Sales revenue Less: Variable expenses Contribution margin [ Less: Fixed expenses Operating income Requirements 4 and 5. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U.) Management would like to determine the portion of the master budget variance that is a due to volume being different than onginal y anticipate and e to some other unexpected cause. repareane ud et performance or 0) address these questions, using the actual sales volume of 60,000 units and the budgeted sales volume of 56,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 51,000 to 65,000 units Begin by completing the actual and master budget columns of the performance report and then the master budget variances. Then compute the flexible budget column and the remaining variance columns. (Round all amounts to the nearest whole dollar. For accounts with a 0 balance, make sure to enter"" in the appropriate column. Label each variance as favorable (F) or unfavorable (U).) Requirement 3. What is the budgeted fixed cost for the period? The budgeted fixed cost for the period is $ Requirement 2. What is the budgeted variable expense per unit? The budgeted variable expense per unit is $ Requirement 1. What is the budgeted sales price per unit? The budgeted sales price per unit is $ The Precious Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in contribution margin format for December: (Click the icon to view the performance report in contribution margin format.) Read the requirements
