Prepare and interpret a performance report

The company sold 70,000 bubble kits during March and its actual operating income was as follows:

POPPING BUBBLES, INC.
Master Budget Income Statement
Month Ended October 31
Sales revenue $211,000
Variable expenses:
Cost of goods sold $84,500
Sales commissions 15,500
Utility expense 14,000
Fixed expenses:
Salary expense 35,100
Depreciation expense 18,000
Rent expense 10,550
Utility expense 5,000
Total expenses $182,650
Operating income $28,350
Requirements

1. Prepare an income statement performance report for October.
2. What accounts for most of the difference between actual operating income and master budget operating income?
3. What is Popping Bubbles’ master budget variance for operating income? Explain why the income statement performance report provides Popping Bubbles’ managers with more useful information than the simple master budget variance. What insights can Popping Bubbles’ managers draw from this performance report?