P10-44A, Flowing Bubbles, Inc. produces multicolored bubble solution used for weddings and other events. The company sold 60,000 bubble kits during August and its actual operating income was as follows:

Flowing Bubbles, Inc. Flexible But income Statement Month Ended August 31 $ 194 100 Budget per Output Output UniK) annon 000 Flowing Bubbles, Inc. Income Statement Month Ended August 31 Sales revenue Variable expenses Cost of goods sold Sales commissions Utility expense Fixed expenses Salary expense Depreciation expense Rent expense $ 75,200 17.500 6,000 310 196,000 5170500 201,500 125 0.25 68,750 13.750 79.000 15.000 8.000 1.250 6.250 6500 5500 32,200 20.000 14.450 7 000 Sales revenue Variable expenses Cost of goods sold Sales commissions y expense Fed expenses Salary pense Deprecation expense Rent expense pense Total expenses 300 Uity expense 20.000 15.000 7.000 30000 20.000 15.000 7000 33.000 20.000 19.000 7000 Total expenses $ 172,350 $ 21.750 Operating income ......... $ $ 160,000 $ 10.500 $ 158,000 5 186.000 1 000 $ 15500 Operating income 1. Prepare an income statement performance report for August. Note: The master budget was based on expected sales volume of 55,000 bubble kits. 2. What accounts for most of the difference between actual operating income and master budget operating income? 3. What is Flowing Bubbles' master budget variance? Explain why the income statement performance report provides Flowing Bubbles managers with more useful information than the simple master budget variance. What insights can Flowing Bubbles' managers draw from this performance report? Flowing Bubbles, Inc. Income Statement Performance Report For the month ended August 31 Actual Flexible Budget Variance Flexible Budget Master Budget Variance Output units Sales revenue Variable expenses Cost of goods sold Sales commissions expense HHHHH Uity expense Fixed expenses Salary expense Depreciation expense Rent expense Utility expense Total expenses Operating income Choose from any list or enter any number in the input fields and then click Check Answer Requirement 2. What counts for most of the forence between actual income and master but operating inome? Te Most of the difference between m a laperigicomed for operating income in lugar than the bubbla kita than expected allowing income resulted from Requirement 3. What is Flowing Bubbles' master budget variance? Explain why the income statement performance report provides Flowing Bubbles' managers with more useful information than the simple master budget variance. What insights can Flowing Bubbles' managers draw from this performance report? meaning that its operating income is Flowing Bubbles' master budget variance is $ than expected