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, 2017Sales$3,150,000Cost of goods soldDirect materials$975,000Direct labor210,000Machinery repairs (variable cost)45,000DepreciationPlant equipment (straight-line)315,000Utilities ($30,000 is variable)180,000Plant management salaries190,0001,915,000Gross profit1,235,000Selling expensesPackaging75,000Shipping105,000Sales salary (fixed annual amount)235,000415,000General and administrative expensesAdvertising expense125,000Salaries230,000Entertainment expense90,000445,000Income from operations$375,000

Problem 21-1A Part 1&2

Required:

1&2.Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixed