2018 for McCarthy Fendret. Problems Group A P23-25A Preparing a flexible budget performance report Cell One Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 6,000, 7,500, and 9,500 units. The static budget was based on expected sales of 7,500 units Learning Objective 1 3. Static Bud. Var. for Op. Inc $22,900 F 23 CELL ONE TECHNOLOGIES Flexible Budget For the Month Ended July 31, 2018 Budget Amount per Unit 9,500 7,500 6,000 Units $ 126,000 $157,500 $199,500 75,000 $ 21 Sales Revenue 95,000 60,000 10 Variable Expenses 104,500 82,500 66,000 Contribution Margin 55,000 55,000 55,000 Fixed Expenses $ 11,000 $ 27,500 $ 49,500 Operating Income The company sold 9,500 units during July, and its actual operating income was as follows: CELL ONE TECHNOLOGIES Income Statement For the Month Ended July 31, 2018 Sales Revenue $ 206,500 Variable Expenses 100,100 Contribution Margin 106,400 Fixed Expenses 56,000 Operating Income $ 50,400 Requirements 1. Prepare a flexible budget performance report for July 2. What was the effect on Cell One's operating income of selling 2,000 units more than the static budget level of sales? 3. What is Cell One's static budget variance for operating income? 4. Explain why the flexible budget performance report provides more useful infor- mation to Cell One's managers than the simple static budget variance. What insights can Cell One's managers draw from this performance report? 4 P23-26A Prenaring a 0