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Requirements 4 and 5. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U.) Management would like to determine the portion of the master budget variance that is (a) due to volume being different than originally anticipated, and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these questions, using the actual sales volume of 62,000 units and the budgeted sales volume of 59,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 54,000 to 72,000 units. Begin by completing the actual and master budget columns of the performance report and then the master budget variances. Then compute the flexible budget column and the remaining variance columns. (Round all amounts to the nearest whole dollar. Label each variance as favorable (F) or unfavorable (U). If the variance is 0, make sure to enter in a "0". A variance of zero is considered favorable.) The Precious Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in contribution marain format forlu (Click the icon to view the performance report in contribution margin format.) Data table Read the requirements D 1 Flexible Budget Performance Report For the Month Ended July 31 Flexible B The Precious Balloon Company Actual vs. Budget Performance Report For the Month Ended July 31 2 3 Budget Variance Flexible Budget 62000 Actual 62000 Volume Variance 3000 Master Budget Variance Master Budget 59000 Master Budget Varlance Sales volume Sales revenue 225500 206500 19000 109300 105400 100300 9000 Less: Variable expenses Contribution margin Less: Fixed expenses Master 4 Actual Budget 5 ) 5 Sales volume (number of cases sold) 62.000 59,000 6 Sales revenue $ 225,500 S 206,500 7 Loss: Variable expenses 109,300 100,300 8 Contribution margin $ 116,200 $ 106,200 9 Less: Fixed expenses 68,800 67,000 10 Operating Income S 47.400 S 39.200 1162001 68800 106200 67000 10000 1800 47400 39200 8200 Operating income Requirement 6a. Using the flexible budget performance report you prepared for Requirement 5, answer the following question: How muc higher than expected? The amount of the master budget variance for operating income due to volume being higher than expected is Print Done Requirement 6a. Using the flexible budget performance report you prepared for Requirement 5, answer the following question: How much of the master budget variance (calculated in Requirement 4) for operating income is due to volume bei higher than expected? The amount of the master budget variance for operating income due to volume being higher than expected is Requirement 6b. Using the flexible budget performance report you prepared for Requirement 5, answer the following question: How much of the master budget variance for variable expenses is due to some cause other than volume? The amount of the master budget variance for variable expenses due to some cause other than volume is Requirement 6c. Using the flexible budget performance report you prepared for Requirement 5, answer the following question: What could account for the flexible budget variance for sales revenue? could account for the flexible budget variance for sales revenue. Requirement 6d. Using the flexible budget performance report you prepared for Requirement 5, answer the following question: What is the volume variance for fixed expenses? Why is it this amount? (Enter a "0" for any zero amounts.) The volume variance for fixed expenses is because the flexible budget uses the amount for fixed expenses because fixed expenses are
