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 Cost of goods sold $3,375,000 Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($60,000 is variable) Plant management salaries $900,000 150,000 75,000 300,000 220,000 215,000 1,860,000 1,515,000 Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) 90,000 120,000 260,000 470,000 General and administrative expenses Advertising expense Salaries Entertainment expense 125,000 241,000 100,000 466,000 $ 579,000 Income from operations Phoenix Company's actual income statement for 2017 follows PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 $4,098,000 Sales (18,000 units) Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities (fixed cost is $157,500) Plant management salaries $1,097,000 189,000 82,000 300,000 228,750 224,000 2,120,750 1,977,250 Gross profit Selling expenses Packaging Shipping Sales salary (annual) 105,750 136,500 276,000 518,250 General and administrative expenses Advertising expense Salaries Entertainment expense 133,000 241,000 104,000 478,000 $ 981,000 Income from operations PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 Flexible Budget Actual ResultsVariances Fav. I Unfav Variable costs Fixed costs