Phoenix Company's 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. $3,750,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($30,000 is variable) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations $ 750,000 225,000 45,000 315,000 180,000 230,000 1,745,000 2,805,000 60,000 90,000 260,000 410,000 125,000 241,000 110,000 466, $1,129,000 Phoenix Company's actual income statement for 2019 follows. $4,563,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019 Sales (18,000 units) Cost of goods sold Direct materials $ 916,000 Direct labor 277,000 Machinery repairs (variable cost) 46,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities (fixed cost is $148,000) 183,000 Plant management salaries 240,000 1,977,000 Phoenix Company's actual income statement for 2019 follows. $4,563,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019 Sales (18,000 units) Cost of goods sold Direct materials $ 916,000 Direct labor 277,000 Machinery repairs (variable cost) 46,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities (fixed cost is $148,000) 183,000 Plant management salaries 240,000 Gross profit Selling expenses Packaging 69,750 Shipping 101,200 Sales salary (annual) 277,000 General and administrative expenses Advertising expense 134,000 Salaries 241,000 Entertainment expense 103,500 Income from operations 1,977,000 2,586,00 447,750 478,500 $1,659,750 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. Favorable Sales PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2019 Flexible Budget Actual Results Variances Fav. / Unfav. Sales Favorable Variable costs Direct materials Direct labor Unfavorable Unfavorable Machinery repairs Favorable Utilities Favorable Packaging Shipping Favorable Favorable 0 0 Unfavorable Favorable Total variable costs Contribution margin Fixed costs Depreciation-Plant equipment (straight-line) Utilities Plant management salaries Sales salary Advertising expense Salaries Entertainment expense Total fixed costs 0 0 Income from operations
