Phoenix Company's 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 16,000 units. $3,600,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials $1,120,000 Direct labor 240,000 Machinery repairs (variable cost) 80,000 Depreciation-Plant equipment (straight-line) 330,000 Utilities ($64,000 is variable) 224,000 Plant management salaries 215,000 Gross profit Selling expenses Packaging 96,000 Shipping 128,000 Sales salary (fixed annual amount) 250,000 General and administrative expenses Advertising expense 128,000 Salaries 251,000 Entertainment expense 100,000 Income from operations 2,209,000 1,391,000 474,000 479,000 $ 438,000 Phoenix Company's actual income statement for 2019 follows. PHOENIX COMPANY $4,338,000 Statement of Income from Operations For Year Ended December 31, 2019 Sales (19,000 units) Cost of goods sold Direct materials $1,345,000 Direct labor 293,000 Machinery repairs (variable cost) 87,000 Depreciation-Plant equipment (straight-line) 330,000 Utilities (fixed cost is $157,500) 232,750 Plant management salaries 225,000 Gross profit Selling expenses Packaging 111,250 Shipping 145,000 Sales salary (annual) 267,000 General and administrative expenses Advertising expense 137,000 Salaries 251,000 Entertainment expense 103,500 Income from operations 2,512,750 1,825, 250 523, 250 491,500 $ 810,500 Required: 1. Prepare a flexible budget performance report for 2019. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2019 Flexible Budget Actual Results Variances Fav. / Unfav. Sales Variable costs Direct materials Machinery repairs Utilities 0 0 Fixed costs 0