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. $3,750,000 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 ($45,000 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 $ 975,000 225,000 60,000 315,000 195,000 215,000 1,985,000 1,765,000 75,000 105,000 260,000 440,000 132,000 241,000 110,000 $ 483,000 842,000 Phoenix Company's actual income statement for 2017 follows. $4,563,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (18,000 units) Cost of goods sold Direct materials $1,187,000 Direct labor 277,000 Machinery repairs (variable cost) 63,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities (fixed cost is $147,000) 200,000 Plant management salaries 225,000 Gross profit Selling expenses Packaging 87,000 Shipping 118,500 Sales salary (annual) 278,000 General and administrative expenses Advertising expense 140,000 Salaries 241,000 Entertainment expense 114,000 Income from operations 2,267,000 2,296,000 483,500 495,000 $1,317,500 Required: 1. Prepare a flexible budget performance report for 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 Fixed costs