The Precious Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in contribution margin form for August: BBB (Click the icon to view the performance report in contribution margin format.) Read the requirements urin bral urce 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 59,000 units and the budgeted sales volume of 56,000 units. Use the original budget assumptions for sales prio, variable cost per unit, and fixed costs, assuming the relevant range stretches from 51,000 to 64,000 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. For accounts with a balance, make sure to enter in the appropriate column Label each variance as favorable (F) or unfavorable (U).) The Precious Balloon Company Flexible Budget Performance Report dy tion Choose from any list or enter any number in the input fields and then click Check Answer The Precious Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in or August: (Click the icon to view the performance report in contribution margin format.) Read the requirements. Budget Variance 3000 Flexible Budget Volume Variance Master Budget Budget Variance Actual 59000 Sales volume Sales revenue 709 Less: Variable expenses Contribution margin Less: Fixed expenses Operatina income Choose from any list or enter any number in the input fields and then click Check Answer For the Month Ended August 31 Master Master Budget Variance Actual Budget Sales volume (number of cases sold) Sales revenue 59,000 $ 220,000 $ 75,100 56,000 196,000 61,600 Less: Variable expenses Contribution margin Less: Fixed expenses $ 144,900 $ 67,900 $ 77,000 $ 134,400 67,000 67,400 Operating income Print Done Done ata Table The Precious Balloon Company Actual vs. Budget Performance Report For the Month Ended August 31 Master Budget Master Budget Variance Actual es volume (number of cases d) 56,000 les revenue $ 220,000 $ 75,100 196,000 61,600 Iss: Variable expenses ontribution margin $ 144,900 $ 134,400 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 59,000 units and the budgeted sales volume of 56,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 51,000 to 64,000 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
