Phone Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 6,500,8,000, and 10,000 units. The static budget was bas budget and actual operating income was as follows: (Click the icon to view the flexible budget.) B (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 (FYUnfavorable (U) input blank.) 0 Data Table 5 Budget Amounts Per Unit Phone Technologies Flexible Budget Performance Report For the Month Ended July 31, 2018 23 (1)-(3) Flexible Actual Budget Flexible Results Variance Budget 10,000 10,000 $ 227,000 $ 7,000 F $ 220,000 $ _ 145,100 5,100 U 140,000 81,900 1,900 F 80,000 52,000 1,000 u _ 51,000 29.900 $ 900 $ 29,000 $ 4 (3) - (5) Sales Volume Variance Static Budget 8.000 Phone Technologies Income Statement For the Month Ended July 31, 2018 Sales Revenue $ 227,000 145, 100 Variable Expenses Contribution Margin 81,900 52,000 Fixed Expenses 29,900 Operating Income Units Sales Revenue $ S 22 14 44,000 F 28,000 U 176,000 112,000 Variable Expenses Contribution Margin Fixed Expenses 16,000 F 64,000 51.000 13,000 16,000 $ Operating Income Print Done Flexible Budget Variance Sales Volume Variance i Data Table i Requirements Phone Technologies Flexible Budget For the Month Ended July 31, 2018 Budget Amount per Unit 6,500 $ 22 $ 143,000 $ 91,000 52,000 51,000 $ 1,000 $ 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? Units Sales Revenue 14 Variable Expenses Contribution Margin 8,000 176,000 $ 112,000 64,000 51,000 13,000 $ 10,000 220,000 140,000 80,000 51,000 29,000 Fixed Expenses Print Done Operating Income Chod