Great Bubbles, Inc. produces multicolored bubble solution used for weddings and other events. The company sold 70,000 bubble kits during December, and its actual operating income was as follows: (Click the icon to view the actual income statement) The company's flexible budget income statement for December follows (Click the icon to view the flexible budget income statement) Read the requirements Output units Sales revenue Variable expenses Cost of goods sold Sales commissions expense Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense Utility expense Total expenses Income Statement Performance Report For the month ended December 31 The Actual Flexible Budget Variance Flexible Budget These variances suggest that the marketing department did a ||| job by selling Volume Variance I I | 1 Master Budget kits than expected, at a Data table sale price than expected Great Bubbles, Inc. Income Statement Month Ended December 31 Sales revenue Variable expenses Cost of goods sold Sales commissions Utility expense Fixed expenses Salary expense Depreciation expense Rent expense Utility expense Total expenses... Operating income Print $ Done 221,750 87,600 12,500 14,000 32,300 20,000 9,050 5,000 180,450 41,300 This question Data table Sales revenue Variable expenses Cost of goods sold Sales commissions Utility expense Fixed expenses Great Bubbles, Inc. Flexible Budget Income Statement Month Ended December 31 ....... Salary expense Depreciation expense Rent expense Utility expense Total expenses Operating income Flexible Budget per Output Unit $ 3.05 Print 1.25 0.15 0.20 Output Units (Kits) 65,000 70,000 75.000 $198.250 $ 213,500 $ 228,750 S 81,250 9,750 13,000 30.000 20,000 10.000 5,000 $ 169,000 S $ 29,250 S Done 87.500 93,750 10,500 11.250 14,000 15.000 Operating income Requirement 2. What accounts for most of the difference between actual operating income and master budget operating income? Most of the difference between master budget operating income and actual operating income resulted from bubble kits than expected. for operating income is larger than the Requirement 3. What is Great Bubbles master budget variance for operating income? Explain why the income statement performance report provides Great Bubbles managers with more useful information than the simple master budget variance. What insights can Great Bubbles managers draw from this performance report? Great Bubbles master budget variance for operating income is This means that operating income is than expected Choose two reasons why the income statement performance report provides Great Bubbles managers with more information than the simple master budget variance 30.000 20,000 10,000 5,000 33,000 23.000 16.000 5.000 177,000 $ 197,000 36.500 S 31.750