Outrageous Bubbles, Inc. produces multicolored bubble solution used for weddings and other events. The company sold 70,000 bubble kits during January, and its actual Operating income was as follows: B (Click the icon to view the actual income statement.) The company's flexible budget income statement for January follows: (Click the icon to view the flexible budget income statement.) Read the requirements Requirement 1. Prepare the income statement performance report. Nole: The master budget was based on expected sales volume of 65,000 bubble kits. (For accounts with a balance, make sure to enter "o" 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 January 31 Actual Flexible Volume Master Flexible Budget Variance Budget Variance Budget Output units F U Sales revenue Variable expenses Cost of goods sold Sales commissions expense Utility expense Fixed expenses: expen Depreciation expense Rent expense DIIDID Utility expense Total expenses Operating Income Choose from any list or enter any number in the input fields and then click Check Answer. i Data Table Data Table (similar to) ubbles, Inc. produces multicolored bubble solution used for weddings and other events. The company sold 70,000 bube icon to view the actual income statement.) s flexible budget Income statement for January follows: icon to view the flexible hudort income statement.) diren A Requirements 1. 212,000 Outrageous Bubbles, Inc. Flexible Budget Income Statement Month Ended January 31 Flexible Budget per Output Unit Output Units (Kits) 65,000 70,000 75,000 1. Prepare an income statement performance report for January. Nole: The master budget was based on expected sales volume of 65,000 bubble kits 2. What accounts for most of the difference between actual operating income and master budget operating income? 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, Inc. Income Statement Month Ended January 31 S Sales revenue Variable expenses: Cost of goods sold ....S S Sales commissions Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense 87,800 23,250 3,500 s 2.90 $ 188,500 $ 203,000 $ 217,500 32,300 1.25 87,500 81,250 19,500 93,750 22,500 0.30 21.000 20,000 6,950 6,000 Print Sales revenue Variable expenses Cost of goods sold Sales commissions Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense Done 0.05 3,250 3,500 3,750 Utility expense S Total expenses .............. S Operating income... niset is sold missions expense Se 179,800 32,200 III 1 III 30,000 30,000 33,000 20,000 20,000 23,000 8,000 8.000 12,000 6,000 6,000 6,000 $ 160,000 $ 178,000 $ 194,000 $ 20,500 $ 27,000 $ 23,500 Print Done Utility expense nse II Total expenses 7 expenso II Operating income se inses Print Done