Question
Phoenix Company reports the following fixed budget. It is based on an expected production and sales volume of 15,000 units. PHOENIX COMPANY Fixed Budget For
Phoenix Company reports the following fixed budget. It is based on an expected production and sales volume of 15,000 units.
| PHOENIX COMPANY | |
| Fixed Budget | |
| For Year Ended December 31 | |
| Sales | $ 3,000,000 |
|---|---|
| Costs | |
| Direct materials | 975,000 |
| Direct labor | 225,000 |
| Sales staff commissions | 60,000 |
| DepreciationMachinery | 300,000 |
| Supervisory salaries | 200,000 |
| Shipping | 225,000 |
| Sales staff salaries (fixed annual amount) | 250,000 |
| Administrative salaries | 411,000 |
| DepreciationOffice equipment | 195,000 |
| Income | $ 159,000 |
Required: 1&2. Prepare flexible budgets at sales volumes of 14,000 and 16,000 units. 3. The companys business conditions are improving. One possible result is a sales volume of 18,000 units. Prepare a simple budgeted income statement if 18,000 units are sold.
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The Lakeside Company Case Studies In Auditing
Authors: John Trussel, J. Douglas Frazer
12th Edition
0132567253, 978-0132567251
