The Outrageous Balloon Company produces party balloons that are sold in multipack cases. To follow is the company's performance report in contribution margin format for January Click the icon to view the performance report in contrbution margin format) Read the requirements 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 orginally 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 54,500 units and the budgeted sales volume of 51,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs assuming the relevant range stretches from 46,000 to 50,500 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 For accounts with a 0 balance, make sure to enter "o" in the appropriate column Label each variance as favorable (F) or unfavorable()) The Outrageous toon Company produces party balloons that are sold in mub pack cases. To follow is the company's performance report in contbuton margin format for January (Click the icon to view the performance report in contribution margin format) Data Table Read the requirements original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 4 Begin by completing the actual and master budget columns of the performance report and then the master budget variances. The For accounts with a balance, make sure to enter in the appropriate column label each variance as favorable (F) or unfave The Outrageous Balloon Company Actual vs Budget Performance Report The Outrageous Balloon Company For the Month Ended January 31 Flexible Budget Performance Report Master For the Month Ended January 31 Mester Budget Flexible Master Actual Variance Budget Flexible Volume Master Budget Sales volume number of cases 54.500 sold 51,000 Actual Variance Budget Variance Budget Variance Sales volume 54500 Sales revenue F 51000 $168.900 5 147 900 78,300 Sales revenue 66 300 168900 Less Variable expenses 147900 78300 Less Variable expenses 66300 Contribution margin $ 90,6005 81,600 71.000 71.000 Less Foxed expenses 90600 Contribution margin 81600 18.800 5 10.000 Less Fed expenses 71800 71000 Operating income 18800 10600 Operating income X ort in contribution marg Requirements riance cc jable cost per unit, and get columns of the per uter "o" in the appropria me Outrageous Balloor xible Budget Perform or the Month Ended Flexible Budget Flexibi Variance Budge F 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 (0) 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 54,500 units and the budgeted sales volume of 51,000 units. Use the original budget assumptions for sales price variable cost per unit, and fixed costs, assuming the relevant range stretches from 46,000 to 59.500 units 6. Using the flexible budget performance report you prepared for Requirement 5, answer the following questions 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? What could account for the flexible budget variance for sales revenue? What is the volume variance for fixed expenses? Why is it this amount? a. C. d
