Patterson, Inc. wishes to evaluate, in summary fashion, its financial performance for the most recent period. Budgeted and actual operating results for this period are presented below. Master Budget Actual Results

Units sold 40,000 36,000

Sales $2,000,000 $1,900,000

Variable costs $1,200,000 $1,152,000

Fixed costs $600,000 $660,000

Required: 1. What was the actual operating income for the period?

2. What is the firm's master budget operating income?

3. What was the flexible-budget operating income for the period?

4. What is the total operating-income variance of the period?

5. What was the sales-volume variance, in terms of operating income, for the period?

6. What are the key elements of the traditional financial control model?

7. What are the primary limitations of the traditional financial control model?