7. Outrageous Bubbles, Inc., produces multicolored bubble solution Requirements used for weddings and other events (Click the icon to view the master budget income statement.) Outrageous Bubbles' plant capacity is 62,500 kits. If actual volume exceeds 62,500 kits, the company must expand the plant In that case, salaries will increase by 10%, depreciation by 15%, and rent by $4,000. Fixed utilities will be unchanged by any volume increase 1. Prepare flexible budget income statements for the company showing output levels of 55,000, 60,000, and 65,000 kits 2. Graph the behavior of the company's total costs. Use total costs on the y-axis and volume (in thousands of bubble kits) on the x-axis 3. Why might Outrageous Bubbles' managers want to see the graph you prepared in Requirement 2 as well as the columnar format analysis in Requirement 1? What is the disadvantage of the graphic approach? Requirement 1. Prepare flexible budget income statements for the company, showing output levels of 55,000, 60,000, and 65,000 kits. (Enter the per unit information to two decimal places.) Outrageous Bubbles, Inc. Flexible Budget Income Statement Month Ended March 31 Flexible Budget per Output Unit Output Units (Kits) 60,000 65,000 55,000 Sales revenue