Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 18,000 units. $3,600,000 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 ($54,000 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 $ 990,000 180,000 72,000 315,000 214,000 230,000 2,001,000 1,599,000 90,000 126,000 270,000 486,000 130,000 251,000 90,000 471,000 $ 642,000 Phoenix Company's actual income statement for 2017 follows. PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (21,000 units) Cost of goods sold Direct materials $1,170,000 Direct labor 218,000 $4,263,000 Phoenix Company's actual income statement for 2017 follows. $4,263,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (21,000 units) Cost of goods sold Direct materials $1,170,000 Direct labor 218,000 Machinery repairs (variable cost) 75,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities (fixed cost is $158,000) 220,000 Plant management salaries 240,000 Gross profit Selling expenses Packaging 102,500 Shipping 139,500 Sales salary (annual) 288,000 General and administrative expenses Advertising expense 138,000 Salaries 251,000 Entertainment expense 93,500 Income from operations 2,238,000 2,025,000 530,000 482,500 $1,012,500 Required: 1. Prepare a flexible budget performance report for 2017. PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 Required: 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 Variances Fav. / Unfav. Variable costs 0 0 Fixed costs