CellBase Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 9,000, 10,500, and 12,500 units. The static budget was based on expected sales of 10,500 units. The company sold 12,500 units during July. Its flexible budget and actual operating income was as follows: (Click the icon to view the flexible budget.) (Click the icon to view the income statement.) Read the requirements Units Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income CellBase Technologies Flexible Budget Performance Report For the Month Ended July 31, 2018 2 5 (1)-(3) Budget Flexible (3)-(5) Sales Amounts Actual Budget Flexible Volume Static Per Unit Results Variance Budget Variance Budget Requirement 2. What was the effect on CellBase's operating income of selling 2,000 units more than the static budget level of sales? Selling 2,000 units more than the static budget level of sales CellBase's operating income by $ Requirement 3. What is CellBase's static budget variance for operating income? CellBase's static budget variance is S per the static budget. meaning that its operating income is than expected Requirement 4. Explain why the flexible budget performance report provides more useful information to CellBase's managers than the simple static budget variance. What insights can CellBase's managers draw from this performance report? Choose two reasons why the flexible budget performance report provides CellBase's managers with more information than the simple static budget variance. These variances suggest that the marketing department did a job. They sold units than expected and sold them at a price than expected. Data table CellBase Technologies Flexible Budget For the Month Ended July 31, 2018 Budget Amount per Unit Units 9,000 10,500 12,500 Sales Revenue $ 20 $ 180,000 $210,000 $250,000 Variable Expenses 11 99,000 115,500 137,500 Contribution Margin 81,000 94,500 112,500 Fixed Expenses 58,000 58,000 58,000 $ 23,000 $ 36,500 $ 54,500 Operating Income Data table CellBase Technologies Income Statement For the Month Ended July 31, 2018 Sales Revenue $ 257,000 142,500 Variable Expenses Contribution Margin Fixed Expenses 114,500 59,000 $ 55,500 Operating Income - X Requirements 1. Prepare a flexible budget performance report for July. 2. What was the effect on CellBase's operating income of selling 2,000 units more than the static budget level of sales? 3. What is CellBase's static budget variance for operating income? 4. Explain why the flexible budget performance report provides more useful information to CellBase's managers than the simple static budget variance. What insights can CellBase's managers draw from this performance report?