Phoenix Companys 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	$	750,000
Direct labor		225,000
Machinery repairs (variable cost)		45,000
DepreciationPlant equipment (straight-line)		300,000
Utilities ($30,000 is variable)		190,000
Plant management salaries		230,000			1,740,000
Gross profit					1,635,000
Selling expenses
Packaging		60,000
Shipping		90,000
Sales salary (fixed annual amount)		270,000			420,000
General and administrative expenses
Advertising expense		129,000
Salaries		251,000
Entertainment expense		100,000			480,000
Income from operations				$	735,000

Phoenix Companys actual income statement for 2017 follows.

PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017
Sales (18,000 units)				$	4,128,000
Cost of goods sold
Direct materials	$	916,000
Direct labor		279,000
Machinery repairs (variable cost)		46,000
DepreciationPlant equipment (straight-line)		300,000
Utilities (fixed cost is $157,000)		192,250
Plant management salaries		241,000			1,974,250
Gross profit					2,153,750
Selling expenses
Packaging		70,000
Shipping		100,500
Sales salary (annual)		287,000			457,500
General and administrative expenses
Advertising expense		138,000
Salaries		251,000
Entertainment expense		103,500			492,500
Income from operations				$	1,203,750

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 Fixed costs 0