Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 17,000 units. $4,250,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales Cost of goods sold Direct materials $850,000 Direct labor 170,000 Machinery repairs (variable cost) 51,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities ($34,000 is variable) 184,000 Plant management salaries 200,000 Gross profit Selling expenses Packaging 68,000 Shipping 102,000 Sales salary (fixed annual amount) 270,000 General and administrative expenses Advertising expense 125,000 Salaries 251, 000 Entertainment expense 110,000 Income from operations 1,770,000 2,480,000 440,000 486,000 $1,554,000 Phoenix Company's actual income statement for 2017 follows. $5,063,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (20,000 units) Cost of goods sold Direct materials $1,015, 000 Direct labor 208,000 Machinery repairs (variable cost) 52,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities (fixed cost is $147, 000) 186, 000 Plant management salaries 209,000 Gross profit Selling expenses Packaging 77,500 Shipping 112,000 Sales salary (annual) 286,000 General and administrative expenses Advertising expense 133,000 Salaries 251, 000 Entertainment expense 113,500 Income from operations 1,985,000 3,078,000 475,500 497,500 $2,105,000 Required: 1. Prepare a flexible budget performance report for 2017 PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Fixed costs