Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 16,000 units. $3,600,898 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 (548,800 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 $1,040,000 160,000 64,000 380,089 288,080 215,00 1,987,000 1,613,000 80,000 112,000 250,089 442,000 128,000 251,080 99,000 469,900 $ 702,000 Phoenix Company's actual income statement for 2017 follows. 29 $4,353,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (19,000 units) Cost of goods sold Direct materials $1,252,000 Direct labor 198,000 Machinery repairs (variable cost) 68,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities (fixed cost is $157,000) 213,250 Plant management salaries 225,000 Gross profit Selling expenses Packaging 92,500 Shipping 125,500 Sales salary (annual) 266,000 General and administrative expenses Advertising expense 136,000 Salaries 251,000 Entertainment expense 93,000 Income from operations 2,256,250 2,096,750 484,000 480,000 $1,132,750 Required: 1. Prepare a flexible budget performance report for 2017