Phoenix Companys 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 16,000 units.

Required: 1. Prepare a flexible budget performance report for 2019. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)

$3,600,eee 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 ($48,808 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 $ 888,888 248,888 64,000 380,000 198.000 215,888 1,817,280 1,783,000 88,888 112,080 270,882 462,000 132,888 241,888 92,000 463,eee $ 858,698 Phoenix Company's actual Income statement for 2019 follows. $4,338, een PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019 Sales (19,000 units) Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities (fixed cost is $148,eee) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (annual) General and administrative expenses Advertising expense Salaries Entertainment experise Income from operations $ 966,000 293,080 67,800 388,888 284,250 226,000 2,056,250 2,281,750 92,750 126,000 286,080 584,750 139,000 241,899 93,880 473,000 $1,384, eee PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2019 Flexible Budget Actual Results Variances Fav. / Unfav. $ 4,338,000 Favorable Sales Variable costs Direct materials Direct labor Machinery repairs Utilities Packaging Shipping 966,000 293,000 67,000 Unfavorable Unfavorable Favorable Favorable Favorable Favorable 92.750 126,000 0 1,544,750 Unfavorable Favorable Total variable costs Contribution margin Fixed costs Depreciation-Plant equipment (straight-line) 300,000 300,000 o No variance Plant management salaries Sales salary Advertising expense Salaries Entertainment expense 215,000 270,000 132,000 241,000 90,000 226,000 288,000 139,000 241.000 93,000 11,000 Unfavorable 16,000 Unfavorable 7,000 Unfavorable O No variance 3.000 Unfavorable Total fixed costs 1,248,000 1.285.000 Unfavorable Income from operations 5 1,304,000 Favorable