$3,825,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($34,000 is variable) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations $ 935,000 255,000 51,000 330,000 184,000 200,000 1,955,000 1,870,000 68,000 102,000 260,000 430,000 128,000 251,000 100,000 479,000 961,000 $ Phoenix Company's actual income statement for 2017 follows. Phoenix Company's actual income statement for 2017 follows. $4,578,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (20,000 units) Cost of goods sold Direct materials $1,116,000 Direct labor 308,000 Machinery repairs (variable cost) 52,000 Depreciation-Plant equipment (straight-line) 330,000 Utilities (fixed cost is $147,500) 186,500 Plant management salaries 209,000 Gross profit Selling expenses Packaging 77,250 Shipping 112,000 Sales salary (annual) 277,000 General and administrative expenses Advertising expense 136,000 Salaries 251,000 Entertainment expense 103,000 Income from operations 2,201,500 2,376,500 466,250 490,000 $1,420,250 1. Prepare a flexible budget performance report for 2017 PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 Flexible Budget Actual Results $ 4,500,000 $ 4,563,000 Variances Fav./Unfav. $ 63,000 Favorable Sales Variable costs Direct materials Direct labor Machinery repairs 1,100,000 200,000 100,000 80,000 120,000 160,000 1,116,000 208,000 92,000 79,250 117,000 137,000 16,000 (Unfavorable 8,000 Unfavorable 8,000 Favorable 750 Favorable 3,000 Favorable 23,000 Favorable Utilities Packaging Shipping Total variable costs 1.760,000 1,749,250 10,750 Favorable 2,740,000 2,813,750 73,750 Favorable Contribution margin Fixed costs Depreciation--Plant equipment (straight-line) Utilities 330,000 Plant management salaries Sales salary Advertising expense 330,000 150,000 200,000 260,000 128,000 251,000 90,000 148,000 210,000 278,000 137,000 251,000 93,500 O No variance 2,000 Favorable 10,000 Unfavorable 18,000 unfavorable 9,000 Unfavorable 0 No variance 3,500 Unfavorable Salaries Entertainment expense Total fixed costs Income from operations 1,409,000 1,331,000 1,447,500 1,366,250 38,500 Unfavorable 35,250 Favorable $ $ $ $3,825,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($34,000 is variable) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations $ 935,000 255,000 51,000 330,000 184,000 200,000 1,955,000 1,870,000 68,000 102,000 260,000 430,000 128,000 251,000 100,000 479,000 961,000 $ Phoenix Company's actual income statement for 2017 follows. Phoenix Company's actual income statement for 2017 follows. $4,578,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (20,000 units) Cost of goods sold Direct materials $1,116,000 Direct labor 308,000 Machinery repairs (variable cost) 52,000 Depreciation-Plant equipment (straight-line) 330,000 Utilities (fixed cost is $147,500) 186,500 Plant management salaries 209,000 Gross profit Selling expenses Packaging 77,250 Shipping 112,000 Sales salary (annual) 277,000 General and administrative expenses Advertising expense 136,000 Salaries 251,000 Entertainment expense 103,000 Income from operations 2,201,500 2,376,500 466,250 490,000 $1,420,250 1. Prepare a flexible budget performance report for 2017 PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 Flexible Budget Actual Results $ 4,500,000 $ 4,563,000 Variances Fav./Unfav. $ 63,000 Favorable Sales Variable costs Direct materials Direct labor Machinery repairs 1,100,000 200,000 100,000 80,000 120,000 160,000 1,116,000 208,000 92,000 79,250 117,000 137,000 16,000 (Unfavorable 8,000 Unfavorable 8,000 Favorable 750 Favorable 3,000 Favorable 23,000 Favorable Utilities Packaging Shipping Total variable costs 1.760,000 1,749,250 10,750 Favorable 2,740,000 2,813,750 73,750 Favorable Contribution margin Fixed costs Depreciation--Plant equipment (straight-line) Utilities 330,000 Plant management salaries Sales salary Advertising expense 330,000 150,000 200,000 260,000 128,000 251,000 90,000 148,000 210,000 278,000 137,000 251,000 93,500 O No variance 2,000 Favorable 10,000 Unfavorable 18,000 unfavorable 9,000 Unfavorable 0 No variance 3,500 Unfavorable Salaries Entertainment expense Total fixed costs Income from operations 1,409,000 1,331,000 1,447,500 1,366,250 38,500 Unfavorable 35,250 Favorable $ $ $
