Phoenix Companys 2013 master budget included the following fixed budget report. It is based on an expected production and sales volume of 17,000 units.

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

Sales				$	3,400,000
Cost of goods sold
Direct materials	$	990,000
Direct labor		240,000
Machinery repairs (variable cost)		75,000
Depreciationplant equipment		315,000
Utilities ($55,000 is variable)		205,000
Plant management salaries		230,000			2,055,000
Gross profit					1,345,000
Selling expenses
Packaging		75,000
Shipping		115,000
Sales salary (fixed annual amount)		270,000			460,000
General and administrative expenses
Advertising expense		132,000
Salaries		241,000
Entertainment expense		100,000			473,000
Income from operations				$	412,000

Phoenix Companys actual income statement for 2013 follows.

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

Sales (20,000 units)				$	4,063,000
Cost of goods sold
Direct materials	$	1,179,706
Direct labor		291,353
Machinery repairs (variable cost)		80,235
Depreciationplant equipment		315,000
Utilities (fixed cost is $147,500)		211,456
Plant management salaries		241,000			2,318,750
Gross profit					1,744,250
Selling expenses
Packaging		85,485
Shipping		127,794
Sales salary (annual)		286,000			499,279
General and administrative expenses
Advertising expense		141,000
Salaries		241,000
Entertainment expense		103,500			485,500
Income from operations				$	759,471

Required:
1.	Prepare a flexible budget performance report for 2013. (Do not round intermediate calculations.)

PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2013 Flexible Budget Actual ResultsVariances Fav. I Unfav Sales $4,000,000 $4,063,000 $ 63,000 Favorable Variable costs 1,179,706 291,353 80,235 Direct materials Direct labor Machinery repairs Utilities Packaging Shipping 1,164,705 15,000 Unfavorable Unfavorable Favorable Favorable Favorable Favorable 85,485 127,794 1,764,573 Total variable costs Contribution margin Fixed costs 1,164,705 Unfavorable Favorable 315,000 Depreciation Plant equipment Utilities Plant management salaries Sales salary Advertising Salaries Entertainment expense 315,000 147,500 241,000 286,000 141,000 241,000 103,500 No variance Favorable Unfavorable Unfavorable Unfavorable No variance Unfavorable 241,000 Total fixed costs 556,000 1,475,000 Unfavorable Income from operations Favorable