Precious 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 Precious Bubbles, Inc. Income Statement Month Ended March 31 Sales revenue $ 221,500 Variable expenses: Cost of goods sold $ 88,400 Sales commissions 11,500 Utility expense 14,000 Fixed expenses: 32,300 Salary expense Depreciation expense 20,000 Rent expense 9,850 Utility expense 5,000 Total expenses $ 181,050 $ Operating income 40,450 ] . Data table ua per Output Unit Output Units (Kits) 65,000 70,000 75,000 $ 3.05 $ 198,250 $ 213,500 $ 228,750 1.25 81,250 87,500 93,750 0.15 10,500 11,250 Sales revenue Variable expenses: Cost of goods sold Sales commissions Utility expense Fixed expenses: Salary expense Depreciation expense Rent expense 9,750 13,000 0.20 14,000 15,000 Cou 33,000 23,000 30,000 20,000 10,000 5,000 30,000 20,000 10,000 5,000 16,000 5,000 Utility expense Total expenses $ 169,000 $ 177,000 $ 197,000 $ Operating income 29,250 $ 36,500 $ 31,750 Requirement 1. Prepare the income statement performance report. Note: The master budget was based on expected sales volume of 85,000 bubble kits (For accounts with a 0 balance, make sure to enter "o" in the appropriate column. Label each variance as favorable (F) or unfavorable (U) A variance of zero in considered favorable) Precious Bubbles, Inc. Income Statement Performance Report For the month ended March 31 Actual Flexible Budget Variance Flexible Budget Volume Variance Master Budget Output units Sales revenue Variable expenses Cost of goods sold Sales commissions expense Uity expense Fred expenses Salary expense Depreciation Expono Rent expense Uity expense Total expenses Operating income Requirement 2. What are The 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 bubble kits than expected Requirement 3. What is Precious Bubbles master budget variance for operating income? Explain why the income statement performance report providos Precious Bubble managers with more useful information than the simple master budget variance. What insights can Precious Bubbles managers draw from this performance report? Precious Bubbles master budget variance for operating income is This means that operating income is than expected Choose two reasons why the income statement performance raport provides Predeus Bubbies' managers with more information than the simple master budget variance od These variances suggest that the marketing departmentada job by selling kits than expected, afa sale price than expected