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The Everlasting Balloon Company produces party balloons that are sold in multi-pack cases. Following is the company's performance report in contribution margin format for August: (Click the icon to view the performance report in contribution margin format.) Read the requirements. Requirement 1. What is the budgeted sales price per unit? The budgeted sales price per unit is $ 3.40 Requirement 2. What is the budgeted variable expense per unit? The budgeted variable expense per unit is Data Table A B The Everlasting Balloon Company Actual vs. Budget Performance Report 2 3 For the Month Ended August 31 Master Budget Master Budget Variance Actual Sales volume (number of cases 5 sold) 62,500 59,000 6 Sales revenue $ 218,600 $ 200,600 7 Less: Variable expenses 134,900 123,900 8 Contribution margin $ 83,700$ 76,700 9 Less: Fixed expenses 68,400 67,000 10 Operating income $ 15,300 $ 9,700 Requirements 1. What is the budgeted sales price per unit? 2. What is the budgeted variable expense per unit? 3. What is the budgeted fixed cost for the period? 4. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U.) 5. Management would like to determine the portion of the master budget variance that is (a) due to volume being different than originally anticipated and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these questions, using the actual sales volume of 62,500 units and the budgeted sales volume of 59,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 54,000 to 72,500 units. 6. Using the flexible budget performance report you prepared for Requirement 5, answer the following questions: How much of the master budget variance (calculated in Requirement 4) for operating income is due to volume being higher than expected? b. How much of the master budget variance for variable expenses is due to some cause other than volume? C. What could account for the flexible budget variance for sales revenue? d. What is the volume variance for fixed expenses? Why is it this amount? a

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