Refer to the information in Problem 23-1A. Phoenix Company's actual income statement for 2017 follows.

Required
1. Prepare a flexible budget performance report for 2017.
2. Analyze and interpret both the
(a) Sales variance
(b) Direct materials cost variance.

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PHOENX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (18,000 unlts) Cost of goods sold $3,648,000 Direct materlals Direct labor Machlnery repalrs (varlable cost) Depreclation-Plant equlpment Utilitles (fixed cost is $147,500) Plant management salarles $1,185,000 278,000 63,000 300,000 200,500 210,000 2.236,500 1,411,500 Gross proft Sellilng expenses 87,500 118,500 268,000 Sales salary (annual) Advertising expense Entertalnment expense 474,000 General and adminlstrative expenses 132,000 241,000 466,500 S 471,000 Income from operations