1. Prepare an income statement performance report for May. Note: The master budget was based on expected sales volume of 45,000 bubble kits. 2. What accounts for most of the difference between actual operating income and master budget operating income? 3. What is Everlasting Bubbles' master budget variance for operating income? Explain why the income statement performance report provides Everlasting Bubbles' managers with more useful information than the simple master budget variance. What insights can Everlasting Bubbles' managers draw from this performance report? Data Table Everlasting Bubbles, Inc. Flexible Budget Income Statement Month Ended May 31 Flexible Budget per Output Unit Output Units (Kits) 45,000 50,000 55,000 Sales revenue $ 3.05 $ 137,250 $ 152,500 $ 167,750 Variable expenses: Cost of goods sold 1.25 56,250 62,500 68,750 Sales commissions 0.15 6,750 7,500 8,250 Utility expense 0.20 9,000 10,000 11,000 Fixed expenses: 30,000 30,000 33,000 Salary expense Depreciation expense 20,000 10,000 4,000 Rent expense 20,000 10,000 4,000 23,000 15,000 Utility expense 4,000 Total expenses $ 136,000 $ 144,000 $ 163,000 $ 1,250 $ 8,500 $ 4,750 Operating income - Data Table Everlasting Bubbles, Inc. Income Statement Month Ended May 31 $ Sales revenue .. 160,500 Variable expenses: Cost of goods sold $ 62,750 Sales commissions 9,500 10,000 Utility expense Fixed expenses: 32,200 Salary expense Depreciation expense 20,000 Rent expense 9,150 4,000 Utility expense $ Total expenses... 147,600 $ 12,900 Operating income