Phone Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 8,500, 10,000, and 12,000 units. The static budget was based on expected sales of 10,000 units. The company sold 12,000 units during July. Its flexible budget and actual operating income was as follows: (Click the icon to view the flexible budget.) (Click the icon to view the income statement.) Read the requirements. Requirement 1. Prepare a flexible budget performance report for July. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.) Phone Technologies Flexible Budget Performance Report For the Month Ended July 31, 2018 1 2 3 4. 5 (1)-(3) (3) - (5) es Budget Flexible Sales Amounts Actual Budget Flexible Volume Static Phone Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 8,500, 10,000, and 12,000 units. The static budget was based on expected sales of 10,000 units. The company sold 12,000 units during July. Its flexible budget and actual operating income was as follows: (Click the icon to view the flexible budget.) (Click the icon to view the income statement.) Read the requirements. Budget Flexible Sales Amounts Actual Budget Flexible Volume Static Per Unit Results Variance Budget Variance Budget Units Sales Revenue Variable Expenses Contribution Margin Fixed Expenses S Operating Income Data table Phone Technologies Income Statement For the Month Ended July 31, 2018 Sales Revenue $ 307,000 Variable Expenses 137,200 Contribution Margin 169,800 Fixed Expenses 55,500 $ 114,300 Operating Income Data table BIVII TUULLUVY Flexible Budget For the Month Ended July 31, 2018 Budget Amount per Unit Units 8,500 10,000 12,000 Sales Revenue S 25 $ 212,500 $ 250,000 $ 250,000 $ 300,000 Variable Expenses 11 93,500 110,000 132,000 Contribution Margin 119,000 140,000 168,000 Fixed Expenses 54,000 54,000 54.000 86,000 $ 114,000 $ 65,000 $ Operating Income Requirements a 1. Prepare a flexible budget performance report for July. 2. What was the effect on Phone's operating income of selling 2,000 units more than the static budget level of sales? 3. What is Phone's static budget variance for operating income? 4. Explain why the flexible budget performance report provides more useful information to Phone's managers than the simple static budget variance. What insights can Phone's managers draw from this performance report? Print Done