Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $3,375,000 Cost of goods sold Direct materials $825,000 Direct labor 225,000 Machinery repairs (variable cost) 60,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities $45,000 is variable) 205,000 Plant management salaries 215,000 1,830,000 Gross profit 1,545,000 Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed annual amount) 260,000 440,000 General and administrative expenses Advertising expense 135,000 Salaries 241,000 Entertainment expense 90,000 466,000 Income from operations 639,000 Phoenix Company's actual income statement for 2017 follows. PHOENIX COMPANY Staten of Incom from Operations For Year Ended December 31, 2017 Sales (18,000 units) $4, 128,000 Cost of goods sold Direct materials $1,007,000 Direct labor 277,000 Machinery repairs (variable cost) 63,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities (fixed cost is $157,500) 210, 750 Plant management salaries 226,000 2,083,750 Gross profit 2,044,250 Selling expenses Packaging 88,000 Shipping 118,000 Sales salary (annual) 277,000 483,000 General and administrative expenses Advertising expense 144,000 Salaries 241,000 Entertainment expense 93,000 478,000 Income from operations $1,083, 250 Required: 1. Prepare a flexible budget performance report for 2017. PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 Actual Flexible Budget Results Variances Fav. / Unfav. Variable costs Fixed costs