The following is a partially completed performance report from Water Side Pools, one of Pool Time's competitors. (Click the icon to view the incomplete performance report.) Complete the performance report by filling in all missing values. Be sure to label each variance as favourable (F) or unfavourable (U). Then, answer the following questions: 1. What was the total static budget variance? 2. What was the total sales volume variance? 3. What was the total flexible budget variance? 4. Show that the total sales volume variance and total flexible budget variance sum to the total static budget variance. 5. Interpret the variances, and then give one plausible explanation for the variances shown in this performance report. Complete the performance report by filling in all missing values. Be sure to label each variance as favourable (F) or unfavourable (U). (Enter your answers as positive values. For a variance with a zero balance, make sure to enter "0" in the appropriate column. Label each variance as favourable (F) or unfavourable (U) unless the variance is zero, then do not select a label.) Water Side Pools Income Statement Performance Report Year Ended April 30 Output units (pools installed) Sales revenue Variable expenses Fixed expenses Total expenses Operating income Actual Results at Flexible Budget Actual Prices Variance Flexible Budget for Actual Number of Output Units Sales Volume Variance Static (Master) Budget 5 $ 120,000 S 126,000 $ 105,000 58,000 61,000 50,835 21,000 25,000 25,000 79,000 86,000 75,835 41,000 $ 40,000 $ 29,165 1. What was the total static budget variance? The static budget variance was $ 2. What was the total sales volume variance? The sales volume variance is $ 3. What was the total flexible budget variance? The flexible budget variance was $ 4. Show that the total sales volume variance and total flexible budget variance sum to the total static budget variance. sales volume variance+: flexible budget variance = static budget variance. 5. Interpret the variances, and then give one plausible explanation for the variances shown in this performance report. Most of the static budget variance arose because Water Side When we look at revenue and expense components of the flexible budget variance, we see that the company inputs. that it anticipated. Management than it originally anticipated. We know this because of the S sales volume variance. to investigate these variances. Perhaps the sales staff sold very good job of controlling expenses but did not achieve the that required production Water Side Pools Income Statement Performance Report Year Ended April 30 Flexible Budget for Actual Results at Flexible Budget Actual Number of Sales Volume Static (Master) Actual Prices Variance Output Units Variance Budget 6 ? ? ? 5 Output units (pools installed) $ 120,000 ? $ 126,000 ? $ 105,000 Sales revenue Variable expenses 58,000 ? 61,000 ? 50,835 21,000 ? 25,000 ? 25,000 Fixed expenses 79,000 ? 86,000 ? 75,835 Total expenses EA 41,000 ? GA 40,000 ? EA 29,165 Operating income