Question

0 CellBase Technologies manufactures capacitors for cellular base stations and other communications applications. The company's July 2018 flexible budget shows output levels of 9,000, 10,500, and 12,500 units. The stalic budget was based on expected sales of 10,500 units. The company sold 12.500 units during July. Its flexible budget and actual operating income was as follows: (Click the icon to view the flexible budget.) (Click the icon to view the income statement.) Read the requirements O Wom Variable Expenses Contribution Margin Fixed Expenses Operating Income Requirement 2. What was the effect on CellBase's operating income of selling 2.000 unils more than the static budget level of sales? Selling 2,000 units more than the static budget level of sales CellBase's operating income by $ Requirement 3. What is CellBase's static budget variance for operating income? CellBase's static budget varlance is $ meaning that its operating income is than expected per the static budget. Requirement 4. Explain why the flexible budget performance report provides more useful information to CellBase's managers than the simple static budget variance. What insights can CellBase's managers draw from this performance report? Choose two reasons why the flexible budget performance report provides CellBase's managers with more information than the simple static budget variance. These variances suggest that the marketing department did a job. They sold units than expected and sold them at a V price than expected. Choose from any list or enter any number in the input fields and then continue to the next question. ?

Answer 1

(1)
CellBase Technologies
Flexible Budget Performance Report for July, 2018 Month
(Amount in $)		1	2 (1) -(3)		3	4 (3) -(5)		5
	Budgeted amount per unit	Actual Result	Flexible Budget Variance		Flexible Budget	Sales Volume Variance		Static Budget
Unit		12,500			12,500			10,500
Sales Revenue	22	2,82,000	7,000	F	2,75,000	44,000	F	2,31,000
Variable expenses	11	1,42,600	5,100	U	1,37,500	22,000	U	1,15,500
Contribution Margin	11	1,39,400	1,900	F	1,37,500	22,000	F	1,15,500
Fixed Expenses		52,000	1,000	U	51,000	-	-	51,000
Operating Income		87,400	900	F	86,500	22,000	F	64,500
(2) Effect on actual operating income by selling addtitional 2000 unit than static budget
	If Actual = stantic	Actual Result
Unit	10,500	12,500
Sales Revenue	2,36,880	2,82,000
Variable expenses	1,19,784	1,42,600
Contribution Margin	1,17,096	1,39,400
Fixed Expenses	52,000	52,000
Operating Income	65,096	87,400
If sales enhanced by 2000 unit than static budget then,
Operating Income increased by $ 22,304 (87400 -65096),
that is Operating Income increased by 34.26 % (22,304/65096 X100).