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. $3,000,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials $975,000 Direct labor 225,000 Machinery repairs (variable cost) 60,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 200,000 Gross profit Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed annual amount) 250,000 General and administrative expenses Advertising expense 125,000 Salaries 241,000 Entertainment expense 90,000 Income from operations 1,955,000 1,045,000 430,000 456,000 159,000 $ Phoenix Company's actual income statement for 2019 follows. $3,648,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019 Sales (18,000 units) Cost of goods sold Direct materials $1,185,000 Direct labor 278,000 Machinery repairs (variable cost) 63,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities (fixed cost is $147,500) 200, 500 Plant management salaries 210,000 Gross profit Selling expenses Packaging 87,500 Shipping 118,500 Sales salary (annual) 268,000 General and administrative expenses Advertising expense 132,000 Salaries 241,000 Entertainment expense 93,500 Income from operations 2,236,500 1,411,500 474,000 466,500 471,000 $ PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2019 Flexible Budget Actual Results Variances Fav. / Unfav. Sales Variable costs Fixed costs