Phoenix Company's 2019 master budget Included the following fixed budget report. It is based on an expected production and sales volume of 17,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales $4,250,000 Cost of goods sold Direct materials $850,000 Direct labor 170,000 Machinery repairs (variable cost) 51,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities ($34,000 is variable) 184,000 Plant management salaries 215,000 1,770,000 Gross profit 2,480,000 Selling expenses Packaging 68,000 Shipping 102,000 Sales salary (fixed annual amount) 270,000 440,000 General and administrative expenses Advertising expense 131,000 Salaries 241,000 Entertainment expense 100,000 472,000 Income from operations $1,568,000 Phoenix Company's actual income statement for 2019 follows. PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019 Sales (20,000 units) $5,048,000 Cost of goods sold Direct materials $1,015,000 Direct labor 207,000 Machinery repairs (variable 51,000 cost) Depreciation-Plant equipment 300,000 (straight-line) Utilities (fixed cost is 186,000 $147,000) Plant management salaries 225,000 1,984,000 Gross profit 3,064,000 Selling expenses Packaging 77,750 Shipping 112,000 Sales salary (annual) 286,000 475, 750 General and administrative expenses Advertising expense 139,000 Salaries 241,000 Entertainment expense 103,500 483,500 Income from operations $2,104,750 Required: 1. Prepare a flexible budget performance report for 2019. (Indicate the effect of each varlance by selecting for favorable, unfavorable, and No variance.) PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2019 Flexible Actual Fav. Variances Budget Results Unfav. $ $5,000,000 5,063.000 $ 63,000 Favorable Sales Variable costs Direct materials Direct labor Machinery repairs 1,200,000 1,217,000 400,000 408,000 40,000 32,000 20,000 19,500 60,000 57.750 100,000 92,500 17,000 (Unfavorable 8,000 Unfavorable 8.000 Favorable 500 Favorable 2.250 Favorable 7,500 Favorable Utilities Packaging Shipping 1,820,000 1,826,750 315,000 Fixed costs DepreciationPlant equipment straight-line) Utilities Plant management salaries Sales salary Advertising expense Salaries Entertainment expense 160,000 215,000 260,000 129,000 241,000 100,000 315,000 157.0001 225.000 277.000 138,000 241,000 103,500 No variance 3,000 Favorable 10,000 Unfavorable 17,000 Unfavorable 9,000 Unfavorable No variance 3,500 Unfavorable Total fixed costs Income from operations 1,420,000 1,456,500 36,500 Unfavorable $ $ 176,000 1,779.750 $ 19,750 Favorable