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ses. To follow is the company's performance report in contribution margin format for August: Data Table The Outrageous Balloon Company Actual vs. Budget Performance Report

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ses. To follow is the company's performance report in contribution margin format for August: Data Table The Outrageous Balloon Company Actual vs. Budget Performance Report For the Month Ended August 31 Master Budget Master Budget Variance Actual Sales volume (number of cases sold) Sales revenue 60,000 57,000 Less: Variable expenses Contribution margin 217,800 $ 124,500 93,300 $ 66,200 193,800 114,000 79,800 65,000 Less: Fixed expenses Operating income $ 27,100 $ 14.800 PR 7 of 9 (1 complete) ulti-pack cases. To follow is the company's performance report in contribution margin format for August: 0 Requirements 1. What is the budgeted sales price per unit? 2. What is the budgeted variable expense per unit? 3. What is the budgeted fixed cost for the period? 4. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U) 5. 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 60,000 units and the budgeted sales volume of 57,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 52,000 to 70,000 units 6. Using the flexible budget performance report you prepared for Requirement 5, answer the following questions a. How much of the master budget variance (calculated in Requirement 4) for operating income is due to volume being higher than expected? b. How much of the master budget variance for variable expenses is due to some cause other than volume? c. What could account for the flexible budget variance for sales revenue? d. What is the volume variance for fixed expenses? Why is it this amount? Print Dane

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