Flexible Budgets and Standard Cost 3 Problems Group B P23-30B Preparing a flexible budget performance report 1. Static Bud. Var for Op. Inc. $24,500 F Cellular Technologies manufactures capacitors for cellular base stations and other levels of 7,500, 9,000, and 11,000 units. The static budget was based on expected sales of 9,000 units. communication applications The company's July 2016 flexible budget shows ourput CELLULAR TECHNOLOGIES Flexible Budget For the Month Ended July 31, 2016 Budget per Unit 1,000 25 $ 187,500 $225,000 275,000 13 97.500 117.000 143,000 90,000 108.000 132,000 56,000 56,000 56,000 5 34,000 5 52,000 $ 76,000 7.500 Sales Revenue Variable Expenses Contribution Margin Fxed Experses Operating Income The company sold 11,000 units during July, and its actual operating income was as follows CELLULAR TECHNOLOGIES Income Statement For the Month Ended July 31, 2016 Sales Revenue Variable Experses Contributions Margin Foxed Expenses Operating Income S 282,000 48,000 134.000 57.500 Requirements 1. Prepare a flexible budget performance report for July 2016 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 informa- tion to Cellular's managers than the simple static budget variance. What insights can Cellular's managers draw from this performance report