Please complete the Veritas Fountain pens, LLC income statement variances for the year ended December 31,2022 (highlighted in yellow ) and complete the questions in yellow.

On the next tab, students will find a contribution margin formatted Income Statement that includes both the Static Budget and Actual Results for one year of operations (tab for informational purposes only.) Students are required to properly calculate the data points listed below which are included in cells highlighted in yellow on the 'Variance Analysis' tab herein. (This tab includes the budgeted and actual income statement figures using cell references.) In summary, students should complete necessary calculations in the following cadence: Static Budget Variances (Level 1) - Once calculated, students must indicate in the adjacent column, whether the variances calculated are regarded as Favorable or Unfavorable by entering an "F" or "U" as appropriate. Flexible Budget Line Items - Calculating the Flexible Budget will be necessary in order for students to subsequently calculate Level 2 variances which dissaggregate 2 and explain the previously calculated Level 1 (Static Budget) Variances. Volume and Flexible Budget Variances (Level 2) - Once calculated, students must 3 indicate in the adjacent column, whether the variances calculated are regarded as Favorable or Unfavorable by entering an "F" or "U" as appropriate. Provide Selected Variance Explanations - For the variances indicated below the income statement information, students must hypothesize and provide a possible 4 explanation for why or how the slected variance came about in context with its favorability (e.g. "The favorable volume variance for Direct Material is the result of the organization having sold fewer units than it had originally planned.")VERITAS Fountain Pens, LLC Income Statement (Static Budget and Actual Results) For the year ended December 31, 2022 / unit Static Budget Actuals units 25,740 29,858 Sales $ 50.00 $ 1,287,000 $ 1,055,340 Variable Costs Cost of Goods Sold Direct Material 4.87 125,354 145,410 Direct Labor Wages 16.26 418,532 468,756 Indirect Cost Allocation 11.38 292,921 246,053 Commissions Expense 3% 1.50 38,610 31,660 Total Variable Costs 34.01 875,417 891,879 Contribution Margin 15.99 411,583 163,461 Fixed Costs Advertising Expense 64,160 57,744 Insurance Expense 22,000 22,440 Selling & Admin. Expense 212,640 227,524 Bad Debt Expense 25,760 22,668 Depreciation Expense 36,000 35,280 Total Fixed Costs 360,560 365,656 Operating Income 51,023 $ (202,195)VERITAS Fountain Pens, LLC Income Statement Variances For the year ended December 31, 2022 Flexible Budget Static Budget Static Budget Volume Variances F/U Flexible Budget Variances F/U Actuals Variances F/U units 25,740 29,858 Sales S 1,287,000 $ 1,055,340 Variable Costs Cost of Goods Sold Direct Material 125,354 145,410 Direct Labor Wages 418,532 468,756 Indirect Cost Allocation 292,921 246,053 Commissions Expense 3% 38,610 31,660 Total Variable Costs 875,417 891,879 Contribution Margin 411,583 163,461 Fixed Costs Advertising Expense 64,160 57,744 Insurance Expense 22,000 22,440 Selling & Admin. Expense 212,640 227,524 Bad Debt Expense 25,760 22,668 Depreciation Expense 36,000 35,280 Total Fixed Costs 360,560 365,656 Operating Income 51,023 (202,195)Selected Variance Explanations Required: Of course you do not have knowledge of what occurred exactly. but draft a possible explanation that could account for the variance [a hypothetical reason]. Limit to 1-2 complete sentences. Fragment statements will not receive credit. Volume Variance for Sales FlexibleBudget Variance for Sales Volume Variance for Direct Labor Flexible-Budget Variance for Direct Labor Volume Variance for Selling aAdmin. Expense FlexibleBudget Variance for Selling & Admin. Expense Level "0" Variance in Operating Income