Thank You
Options for requirement 1
F/U
2
favorable flexible budget varance
favorable volume variance
unfavorable flexible budget varance
unfavorable volume variance
selling 5,000 less
selling 5,000 more
selling 70,000 less
selling 70,000 more
Favorable /Unfavorable
3
Higher / lower
A favorable sales revenue flexible budget variance means the sale price was higher.
A favorable volume variance reveals whether profits increased due to less units being sold.
A favorable volume variance reveals whether profits increased due to more units being sold
An unfavorable sales revenue flexible budget variance means the sale price was higher.
Good/poor
Fewer/more
Everlasting Bubbles, Inc. Income Statement Month Ended December 31 $ Sales revenue 225.000 Variable expenses: Cost of goods sold Sales commissions 5 88,000 16,500 10,500 Everlasting Bubbles, Inc. Flexible Budget Income Statement Month Ended December 31 Flexible Budget per Output Unit Output Units (Kits) 65,000 70,000 75,000 Sales revenue $ 3.10 $ 201,500 $ 217,000 $ 232 500 Variable expenses Cost of goods sold 1.25 81.250 87.500 93.750 Sales commissions 0.20 13,000 14,000 15,000 Utility expense 0.15 9.750 10.500 11,250 Fixed expenses Salary expense 33,000 33.000 36,300 Depreciation expense 18.000 18,000 20,700 Utility expense Foxed expenses Salary expense Depreciation expense Rent expense 35.100 18,000 Utility expense 7,950 3,000 179,050 $ Total expenses $ 46,950 Operating Income Print Done Print Done Requirement 1. Prepare the income statement performance report. Note: The master budget was based on expected sales volume of 65,000 bubble kits. Label each variance as favorable (F) or unfavorable (U). A variance of zero is considered favorable.) Everlasting Bubbles, Inc. Income Statement Performance Report For the month ended December 31 Actual Flexible Volume Master Flexible Budget Variance Budget Variance Budget Output units Sales revenue Variable expenses: Cost of goods sold Sales commissions expense Utility expense Fixed expenses Salary expense Depreciation expense Rent expense Utility expense Total expenses Operating income Requirement 2. What accounts for most of the difference between actual operating income and master budget operating income? Most of the difference between me The for operating income is larger than the bubble kits than expected. nament norformance report provides Everlasting Bubbles, Inc. produces multicolored bubble solution uned for weddings and other events. The company sold 70,000 bubble kits during December, and its actual operating income was as follows: ERB Click the icon to view the actual income statement.) The company's flexible budget income statement for December follows: Click the icon to view the flexible budget income statement.) Read the moments - X Requirements counts with a balanon, make sure to enter in Requirement 1. Prepare the inc Label each variance as favorable 1. Prepare an income statement performance report for December. Note: The master budget was based on expected sales volume of 65,000 bubbleki 2. What accounts for most of the difference between actual operating income and master budget operating income? 3. What is Everlasting Bubbles master budget variance for operating Income? Explain why the nome statement performance report provides Everlasting Bubbles managers with more useful information than the simple master budget variance. What insigh an Everlasting Bubbles managers draw from this performance report? The Requirement 2. What accounts for most of the difference between actunt operating income and master budget operating income? for operating income is larger than the Most of the difference between master budpet operating income and actual operating Income resulted from bubble kits than expected Requirement 3. What is Everlasting Bubbles master budget variance for operating incomo? Explain why the income statement performance report provides Everlasting Bubbles managers with more useful information than the simple master budget variance. What insights can Everlasting Bubbles managers draw from this performance report? Everlasting Bubbler master budget variance for operating income is This means that operating income is than expected Choose two reasons why the income statement performance report provides Everlasting Bubbles managers with more information than the simple master budget variance. These variances suggest that the marketing department did a job by selling kits than expected, at a sale price than expected Everlasting Bubbles, Inc. Income Statement Month Ended December 31 $ Sales revenue 225.000 Variable expenses: Cost of goods sold Sales commissions 5 88,000 16,500 10,500 Everlasting Bubbles, Inc. Flexible Budget Income Statement Month Ended December 31 Flexible Budget per Output Unit Output Units (Kits) 65,000 70,000 75,000 Sales revenue $ 3.10 $ 201,500 $ 217,000 $ 232 500 Variable expenses Cost of goods sold 1.25 81.250 87.500 93.750 Sales commissions 0.20 13,000 14,000 15,000 Utility expense 0.15 9.750 10.500 11,250 Fixed expenses Salary expense 33,000 33.000 36,300 Depreciation expense 18.000 18,000 20,700 Utility expense Foxed expenses Salary expense Depreciation expense Rent expense 35.100 18,000 Utility expense 7,950 3,000 179,050 $ Total expenses $ 46,950 Operating Income Print Done Print Done Requirement 1. Prepare the income statement performance report. Note: The master budget was based on expected sales volume of 65,000 bubble kits. Label each variance as favorable (F) or unfavorable (U). A variance of zero is considered favorable.) Everlasting Bubbles, Inc. Income Statement Performance Report For the month ended December 31 Actual Flexible Volume Master Flexible Budget Variance Budget Variance Budget Output units Sales revenue Variable expenses: Cost of goods sold Sales commissions expense Utility expense Fixed expenses Salary expense Depreciation expense Rent expense Utility expense Total expenses Operating income Requirement 2. What accounts for most of the difference between actual operating income and master budget operating income? Most of the difference between me The for operating income is larger than the bubble kits than expected. nament norformance report provides Everlasting Bubbles, Inc. produces multicolored bubble solution uned for weddings and other events. The company sold 70,000 bubble kits during December, and its actual operating income was as follows: ERB Click the icon to view the actual income statement.) The company's flexible budget income statement for December follows: Click the icon to view the flexible budget income statement.) Read the moments - X Requirements counts with a balanon, make sure to enter in Requirement 1. Prepare the inc Label each variance as favorable 1. Prepare an income statement performance report for December. Note: The master budget was based on expected sales volume of 65,000 bubbleki 2. What accounts for most of the difference between actual operating income and master budget operating income? 3. What is Everlasting Bubbles master budget variance for operating Income? Explain why the nome statement performance report provides Everlasting Bubbles managers with more useful information than the simple master budget variance. What insigh an Everlasting Bubbles managers draw from this performance report? The Requirement 2. What accounts for most of the difference between actunt operating income and master budget operating income? for operating income is larger than the Most of the difference between master budpet operating income and actual operating Income resulted from bubble kits than expected Requirement 3. What is Everlasting Bubbles master budget variance for operating incomo? Explain why the income statement performance report provides Everlasting Bubbles managers with more useful information than the simple master budget variance. What insights can Everlasting Bubbles managers draw from this performance report? Everlasting Bubbler master budget variance for operating income is This means that operating income is than expected Choose two reasons why the income statement performance report provides Everlasting Bubbles managers with more information than the simple master budget variance. These variances suggest that the marketing department did a job by selling kits than expected, at a sale price than expected
