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4 Required information Problem 21-1A Preparation and analysis of a flexible budget LO P1 [The following information applies to the questions displayed below) Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $3,000,000 Cost of goods sold Direct materials $975,000 Direct labor 225,000 Machinery repairs (variable cost) 60,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 200,000 1,955,000 Gross profit 1,045,000 Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (taxed annual amount) 250,000 General and administrative expenses 430,000 Advertising expense 125,000 Salaries 241,000 Entertainment expense 90.000 456,000 Income from operations $ 159,000 Prev 2 3 0 1 of 3 122. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixed budget as variable or fixed. 02-5327 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Flexible Budget Variable Amount Total Fixed per Unit Cost 210.00 Book Flexible Budget for: Units Salet Unit Sales of of 14,000 16,000 erences Sales Variable costs Direct materials Direct labor Machinery repairs Uties Packaging Shipping Contribution margin 0.00 0 0 Prev Requis maciety Utilities Packaging Shipping 0.00 0 0 Contribution margin Fixed costs 33:11 + ok hces Depreciation--Plant equipment straight-line) Utilities Plant management salaries Sales salary Advertising expense Salaries Entertainment expense Total fixed costs Income from operations $ 0 $ 0 $ displayed below.) Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. 2 of 3 2:52:52 book PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $3,000,000 Cost of goods sold Direct materials $975,000 Direct labor 225,000 Machinery repairs (variable cost) 60,000 Depreciation Plant equipment (straight-line) 380,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 200,000 1,955,000 Gross profit 1,045,800 Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed annual amount) 250,000 General and administrative expenses 430, eee Advertising expense 125,000 Salaries 241,000 Entertainment expense 90,000 456,080 Income from operations $ 159,000 fences Part 2 of 3 Problem 21-1A Part 3 10 Doints 3. The company's business conditions are improving. One possible result is a sales volume of 18,000 units. The company president is confident that this volume is within the relevant range of existing capacity. How much would operating income increase over the 2017 budgeted amount of $159,000 if this level is reached without increasing capacity? 8 0252.38 ferences PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2017 Sales in units) 15,000 18,000 Contribution margin (per unit) Contribution margin Faed costs Operating income Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units, PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $3,000,000 Cost of goods sold Direct materials $975,000 Direct labor 225,000 Machinery repairs (variable cost) 60,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 200,000 1,955,600 Gross profit 1,845,000 Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed annual amount) 250,000 430,000 General and administrative expenses Advertising expense 125,000 Salaries 241,000 Entertainment expense 90,000 456,000 Income from operations $ 159,800 Problem 21-1A Part 4 Problem 21-1A Part 4 4. An unfavorable change in business is remotely possible in this case, production and sales volume for 2017 could fall to 12,000 units. How much income for loss) from operations would occur if sales volume falls to this level? (Enter any loss with minus sign.) PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (in units) 15.000 Contribution margin (per unit Contribution margin Faxed costs Operating income foss) 12,000 ! 3 Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.) A manufactured product has the following information for June. Standard Actual Direct materials (6 lbs. @ $8 per lb.) 48,500 lbs. @ $8.10 per lb. Direct labor (2 hrs. $16 per hr.) 15,700 hrs. @ $16.50 per hr. Overhead (2 hrs. @ $12 per hr.) $198,000 Units manufactured 8,000 51:48 ok Inces Exercise 21-8 Standard unit cost; total cost variance LO C2 3 (1) Compute the standard cost per unit. 1:36 Direct materials Direct labor Overhead Total tes (2) Compute the total cost variance for June. Indicate whether the cost variance is favorable or unfavorable. Total cost variance Saved of 3 Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below. A manufactured product has the following information for June. Standard Actual Direct materials (6 lbs. @ $8 per lb.) 48,500 lbs. @ $8.10 per lb. Direct labor (2 hrs. @ $16 per hr.) 15,700 hrs. @ $16.50 per hr. Overhead (2 hrs. @ $12 per hr.) Units manufactured $198,000 8,000 :51:17 ces Exercise 21-9 Direct materials variances LO P2 Compute the direct materials price variance and the direct materials quantity variance. Indicate whether each varia unfavorable AQ = Actual Quantity SQ - Standard Quantity AP = Actual Price SP = Standard Price Arland