Preparing a Flexible Budget Performance Report Cellular Technologies manufactures capacitors for cellular base stations and other communication applications. The company's July 2016 flexible budget shows outputs levels of 7,500, 9,000, and 11,000 units. The static budget was based on expected sales of 9,000 units. Budget Amounts per Units Units 7,500 9,000 11,000 Sales Revenue $25 $ 187,500 $ 225,000 $ 275,000 Variable Expenses 13 97,500 117,000 143,000 Contribution Margin $ 90,000 $ 108,000 $ 132,000 Fixed Expenses 56,000 56,000 56,000 Operating Income $ 34,000 $ 52,000 $ 76,000 The company sold 11,000 units during July. Its actual operating income was as follows: Sales Revenue $ 282,000 Variable Expenses 148,000 Contribution Margin $ 134,000 Fixed Expenses 57,500 Operating Income $ 76,500 REQUIREMENTS

1.) Prepare a flexible budget performance report for July 2016.

2.) What was the effect on Cellular's operating income of selling 2,000 units more than the static budget level of sales?

3.) What is Cellular's static budget variance for operating income?

4.) Explain why the flexible budget performance report provides more useful information to Cellular's managers that the simple static budget variance? What insights can Cellular's managers draw from this performance report? For the Month Ended July 31, 2016 Cellular Technologies Flexible Budget For the Month Ended July 31, 2016 Cellular Technologies Flexible BudgetVariance Analysis Missouri Sporting Goods Company uses a standard costing system in its manufacture of 10-pound dumbbells. The standard cost for steel is $0.60 per pound. Each dumbbell should require 0.3 standard direct labor hours. The standard direct labor rate is $4.50 per hour. During March, the company produced 65,000 dumbbells. It purchased and used 657,000 pounds of steel. The steel cost $381,060. Direct labor hours totaled 22,100. Direct labor cost was $100,555. REQUIREMENTS Using this information, compute the following variances for March. Indicate whether each variance i