Question
Phoenix Companys 2015 master budget included the following fixed budget report. It is based on an expected production and sales volume of 16,000 units. PHOENIX
Phoenix Companys 2015 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, 2015 |
| Sales | $ | 3,600,000 | |||
| Cost of goods sold | |||||
| Direct materials | $ | 880,000 | |||
| Direct labor | 160,000 | ||||
| Machinery repairs (variable cost) | 48,000 | ||||
| Depreciationplant equipment (straight-line) | 315,000 | ||||
| Utilities ($32,000 is variable) | 192,000 | ||||
| Plant management salaries | 230,000 | 1,825,000 | |||
| Gross profit | 1,775,000 | ||||
| Selling expenses | |||||
| Packaging | 64,000 | ||||
| Shipping | 96,000 | ||||
| Sales salary (fixed annual amount) | 260,000 | 420,000 | |||
| General and administrative expenses | |||||
| Advertising expense | 126,000 | ||||
| Salaries | 251,000 | ||||
| Entertainment expense | 110,000 | 487,000 | |||
| Income from operations | $ | 868,000 | |||
| Phoenix Companys actual income statement for 2015 follows. |
| PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2015 |
| Sales (19,000 units) | $ | 4,323,000 | |||
| Cost of goods sold | |||||
| Direct materials | $ | 1,062,000 | |||
| Direct labor | 198,000 | ||||
| Machinery repairs (variable cost) | 49,000 | ||||
| Depreciationplant equipment (straight-line) | 315,000 | ||||
| Utilities (fixed cost is $158,000) | 195,250 | ||||
| Plant management salaries | 239,000 | 2,058,250 | |||
| Gross profit | 2,264,750 | ||||
| Selling expenses | |||||
| Packaging | 74,000 | ||||
| Shipping | 106,500 | ||||
| Sales salary (annual) | 278,000 | 458,500 | |||
| General and administrative expenses | |||||
| Advertising expense | 134,000 | ||||
| Salaries | 251,000 | ||||
| Entertainment expense | 114,000 | 499,000 | |||
| Income from operations | $ | 1,307,250 | |||
| Required: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1. | Prepare a flexible budget performance report for 2015. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Answer is not complete
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Cost Estimating
Authors: Rodney D. Stewart
2nd Edition
0471857076, 978-0471857075
