Great Bubbles, Inc. produces multicolored bubble solution used for weddings and other events. The company sold 70,000 bubble kits during March, and its actual operating income was as follows: (Click the icon to view the actual income statement.) The company's flexible budget income statement for March follows: (Click the icon to view the flexible budget income statement.) Read the requirements. Requirement 1. Prepare the income statement performance report. Note: The master budget was based on expected sales volume of 65,000 bubble kits. (For accounts with a 0 balance, make sure to enter "0" in the appropriate column. Label each variance as favorable (F) or unfavorable (U). A variance of zero is considered favorable.) Great Bubbles, Inc. Income Statement Performance Report For the month ended March 31 Actual Flexible Budget Flexible Volume Master Variance Budget Variance Budget Output units Sales revenue Variable expenses: Cost of goods sold Sales commissions expense Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense Utility expense Total expenses Operating income Requirement 2. What accounts for most of the difference between actual operating income and master budget operating income? The for operating income is larger than the master budget operating income and actual operating income resulted from . Most of the difference between bubble kits than expected. Requirement 3. What is Great Bubbles' master budget variance for operating income? Explain why the income statement performance report provides Great Bubbles' managers with more useful information than the simple master budget variance. What insights can Great Bubbles' managers draw from this performance report? Great Bubbles' master budget variance for operating income is This means that operating income is than expected. Choose two reasons why the income statement performance report provides Great Bubbles' managers with more information than the simple master budget variance. These variances suggest that the marketing department did a job by selling kits than expected, at a sale price than expected. Data table Data table - Great Bubbles, Inc. Income Statement Month Ended March 31 $ 222,500 Sales revenue Variable expenses: Cost of goods sold $ 88,300 Great Bubbles, Inc. Flexible Budget Income Statement Month Ended March 31 Flexible Budget per Output Sales commissions 12,750 Unit 65,000 Output Units (Kits) 70,000 75,000 Utility expense 14,000 Fixed expenses: Sales revenue $ 3.05 $ 198,250 $ 213,500 $ 228,750 Salary expense 32,300 Variable expenses: Depreciation expense 20,000 Cost of goods sold 1.25 Rent expense 9,050 Sales commissions 0.15 81,250 9,750 87,500 93,750 10,500 11,250 5,000 Utility expense $ 181,400 Total expenses Utility expense Fixed expenses: 0.20 13,000 14,000 15,000 $ 41,100 Operating income Salary expense Depreciation expense Rent expense Print Done Utility expense Total expenses Operating income 30,000 20,000 30,000 20,000 23,000 33,000 10,000 10,000 16,000 5,000 5,000 5,000 $ 169,000 $ 177,000 $ 197,000 $ 29,250 $ 36,500 $ 31,750 Print Done A favorable sales revenue flexible budget variance means the sale price was higher. A favorable volume variance reveals whether profits increased due to less units being sold. A favorable volume variance reveals whether profits increased due to more units being sold. An unfavorable sales revenue flexible budget variance means the sale price was higher