Outrageous Bubbles, Inc. produces multicolored bubble solution used for weddings and other events. The company sold 70,000 bubble kits during July, and its actual operating income was as foll (Click the icon to view the actual income statement.) The company's flexible budget income statement for July follows: (Click the icon to view the flexible budget income statement.) Read the requirements. Data table - Data table Outrageous Bubbles, Inc. Flexible Budget Income Statement Month Ended July 31 Flexible Outrageous Bubbles, Inc. Income Statement Month Ended July 31 225,000 Sales revenue Budget Variable expenses: per Output Cost of goods sold 88,000 Unit 65,000 Output Units (Kits) 70,000 Sales commissions 16,500 75,000 Utility expense 10,500 $ 3.10 Sales revenue Variable expenses: Cost of goods sold 1.25 81,250 Sales commissions 0.20 13,000 87,500 14,000 93,750 15,000 Utility expense 0.15 9,750 10,500 11,250 Fixed expenses: Salary expense Depreciation expense Rent expense Utility expense Total expenses 33,000 33,000 36,300 18,000 18,000 20,700 9,000 9,000 15,000 3,000 3,000 $ 167,000 $ 3,000 175,000 $ 195,000 $ 34,500 $ 42,000 $ 37,500 $ 201,500 $ 217,000 $ 232,500 Fixed expenses: Salary expense 35,100 Depreciation expense 18,000 Rent expense 8,050 Utility expense 3,000 179,150 Total expenses 45,850 Operating income Print Done Operating income Print Done - make su . Most of the difference between master budget operating income and actual he income statement performance report provides Outrageous Bubbles' managers with that operating income is Choose two reasons why the income statement performance report provides Outrageous Duppies managers with more information than the simple master budget variance. 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.) Outrageous Bubbles, Inc. Income Statement Performance Report For the month ended July 31 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 Actual Flexible Budget Variance Flexible Budget Volume Master Variance Budget Requirement 2. What accounts for most of the difference between actual operating income and master budget operating income? for operating income is larger than the . Most of the difference between master budget operating income and actual operating income resulted from The bubble kits than expected. Requirement 3. What is Outrageous Bubbles' master budget variance for operating income? Explain why the income statement performance report provides Outrageous Bubbles' managers with more useful information than the simple master budget variance. What insights can Outrageous Bubbles' managers draw from this performance report? Outrageous 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 Outrageous 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