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. $3,200,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials $1,040,000 Direct labor 240,000 Machinery repairs (variable cost) 64,000 Depreciation-Plant equipment (straight-line) 330,000 Utilities ($48,000 is variable) 208,000 Plant management salaries 215,000 Gross profit Selling expenses Packaging 80,000 Shipping 112,000 Sales salary (fixed annual amount) 260,000 General and administrative expenses Advertising expense 134,000 Salaries 251,000 Entertainment expense 100,000 Income from operations 2,097,000 1,103,000 452,000 485,000 166,000 $ Phoenix Company's actual income statement for 2019 follows. $3,863,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019 Sales (19,000 units) Cost of goods sold Direct materials $1,251,000 Direct labor 294,000 Machinery repairs (variable cost) 68,000 Depreciation-Plant equipment (straight-line) 330,000 Utilities (fixed cost is $157,500) 213,750 Plant management salaries 225,000 Gross profit Selling expenses Packaging 92,250 Shipping 126,000 Sales salary (annual) 277,000 General and administrative expenses Advertising expense 143,000 Salaries 251,000 Entertainment expense 103,000 Income from operations 2,381,750 1,481,250 495, 250 497,000 $ 489,000 Flexible Budget Performance Report For Year Ended December 31, 2019 Flexible Budget Actual Results Variances Fav./Unfav. Variable costs 0 0 Fixed costs 0 0