The Blowing Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in contribution margin format for January:

PART ONE. What is the budgeted sales price per unit? The budgeted sales price per unit is .

What is the budgeted variable expense per unit? The budgeted variable expense per unit is . .

What is the budgeted fixed cost for the period? The budgeted fixed cost for the period is .

PART TWO:PART THREE:

B D 1 N The Blowing Balloon Company Actual vs. Budget Performance Report For the Month Ended January 31 3 3 Master Budget Variance 4 Master Budget 58,000 Actual 60,000 $ 202,800 $ 179,800 5 Sales volume (number of cases sold) 6 Sales revenue 7 Less: Variable expenses 8 Contribution margin 9 Less: Fixed expenses 73,800 63,800 $ 129,000 $ 116,000 71,500 70,000 10 Operating income $ 57,500 $ 46,000 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 60,000 units and the budgeted sales volume of 58,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 53,000 to 75,000 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 Blowing Balloon Company Flexible Budget Performance Report For the Month Ended January 31 Flexible Master Budget Flexible Volume Master Budget Actual Variance Budget Budget Variance Variance (2) (1) (3) Sales volume (4) (5) (6) Sales revenue (8) (9) Less: Variable expenses (10) |(11 |(12) Contribution margin (13) (14) |(15 Less: Fixed expenses (16) (17) (18) Operating income 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 being 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? (19) 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.) because the flexible budget uses the (20) amount for fixed The volume variance for fixed expenses is expenses because fixed expenses are (21)