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3. Phoenix Companys 2013 master budget included the following fixed budget report. It is based on an expected production and sales volume of 16,000 units.

3. Phoenix Companys 2013 master budget included the following fixed budget report. It is based on an expected production and sales volume of 16,000 units.

PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2013

Sales

$

3,200,000

Cost of goods sold

Direct materials

$

990,000

Direct labor

255,000

Machinery repairs (variable cost)

60,000

Depreciationplant equipment

300,000

Utilities ($50,000 is variable)

200,000

Plant management salaries

230,000

2,035,000

Gross profit

1,165,000

Selling expenses

Packaging

85,000

Shipping

115,000

Sales salary (fixed annual amount)

250,000

450,000

General and administrative expenses

Advertising expense

126,000

Salaries

261,000

Entertainment expense

110,000

497,000

Income from operations

$

218,000

Phoenix Companys actual income statement for 2013 follows.

PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2013

Sales (19,000 units)

$

3,863,000

Cost of goods sold

Direct materials

$

1,191,625

Direct labor

310,813

Machinery repairs (variable cost)

62,250

Depreciationplant equipment

300,000

Utilities (fixed cost is $147,500)

206,125

Plant management salaries

240,000

2,310,813

Gross profit

1,552,187

Selling expenses

Packaging

98,188

Shipping

129,563

Sales salary (annual)

268,000

495,751

General and administrative expenses

Advertising expense

135,000

Salaries

261,000

Entertainment expense

113,000

509,000

Income from operations

$

547,436

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