The Precious Baloon Company producos party balloons that are sold in muls-pack casos. Folowing is the company's perfornance repert in contribution margin format for January. (Click the ioon to viow the performance roport in contribufion martin lormat) Read the reqiamements Requirement 1. What is the budgoted sales price per unit? The budgoted sales price pet unt is Requirement 2. What is the budgeled variable expense per unit? The budgeted variable expense per urit is Requirement 3. What is the budgeded fixed cost for the period? The budgeted fiend cost for the period is Requirements 4 and 5 . Compute the mastor budget variances, Be sure to indcaie each variance as favoruble (F) or unfavorable (U) Management would like lo delermine the portion of the master budget variance that is (a) due to volume being oferent than origirnily anticipetod, and (b) due to nome other uneopected cause. Propare a fleobbio buitgot performance report so address these assuming the rolevant range stretches from 47,000 to 71.500 unts. Begin by comploting the actual and master budget columns of the perfomance ropert and then the master budget variances. Then compute the texible budget column and the ramaining variance The Precious Balloon Company The Precious Baloon Company produces party balloons that are sold in mult-pack cases. Folowing is the company's performance report in contritufion margin format for Jarnacy: (Click the ieon to view the perlomance report in oontribution margin format) Rend the rogucoments The budgntod fixed cost for the penod is Requirements 4 and 5. Compute the master budget variances. Be sure to indicato each variance as tavorable (F) or unfavorable (U.) Management would like to delemine tha portion of the ma budpot variance that ia (a) due lo volume behg different than ariginaly anticipated, and (b) duo to somo other unexpectod coute. Prepare a flaxible budgot performance roport to addross these questions, veing the actual males volume of 56,500 units and the budgeted sales volume of 52,000 units. Use the oniginal budgot assumptions for saios price, variable cost per unt, and fixed cos assuming the rolevant range stretches from 47,000 to 71,500 units. Bogin by comploding the octual and master budgot columns of the performance report and then the master budget variances. Then computa the feooble budget column and the remaining varian columns. (Round all arnounts to the nearest whole dolar. Labbl each variance at favorable (F) or wntavorablo (U). If the varianco is 0 , make sure ta enter in a "O". A variance of taro is consider favorabla.) Requirements 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 (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 56,500 units and the budgeted sales volume of 52,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 47,000 to 71,500 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
