Cellular Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 6,500, 8,000, and 10,000 units. The static budget was based on expected sales of 8,000 units. The company sold 10,000 units during July. Its flexible budget and actual operating income was as follows:

Cellular Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 6,500,8,000, and 10,000 units. The static budget was based on expected sales of 8,000 units. The company sold 10,000 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 1 - Data table Cellular Technologies Flexible Budget For the Month Ended July 31, 2018 Budget Amount per Unit $ Units Sales Revenue Variable Expenses Contribution Margin Fixed Expenses Operating Income 6,500 8,000 10,000 24 $ 156,000 $ 192,000 $ 240,000 11 71,500 88,000 110,000 84,500 104,000 130,000 50,000 50,000 50,000 $ 34,500 $ 54,000 $ 80,000 Print Done Data table Cellular Technologies Income Statement For the Month Ended July 31, 2018 Sales Revenue $ 247,000 Variable Expenses 115,200 Contribution Margin 131,800 Fixed Expenses 51,000 $ 80,800 Operating Income Print Done Requirements 1. Prepare a flexible budget performance report for July. 2. What was the effect on Cellular's operating income of selling 2,000 units more than the static budget level of sales? 3. What is Cellular's static budget variance for operating income? 4. Explain why the flexible budget performance report provides more useful information to Cellular's managers than the simple static budget variance. What insights can Cellular's managers draw from this performance report? Print Done