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Phoenix Companys 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. PHOENIX
Phoenix Companys 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units.
| PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 | |||||
| Sales | $ | 3,000,000 | |||
| Cost of goods sold | |||||
| Direct materials | $ | 915,000 | |||
| Direct labor | 240,000 | ||||
| Machinery repairs (variable cost) | 45,000 | ||||
| DepreciationPlant equipment (straight-line) | 330,000 | ||||
| Utilities ($45,000 is variable) | 180,000 | ||||
| Plant management salaries | 200,000 | 1,910,000 | |||
| Gross profit | 1,090,000 | ||||
| Selling expenses | |||||
| Packaging | 75,000 | ||||
| Shipping | 105,000 | ||||
| Sales salary (fixed annual amount) | 235,000 | 415,000 | |||
| General and administrative expenses | |||||
| Advertising expense | 150,000 | ||||
| Salaries | 230,000 | ||||
| Entertainment expense | 75,000 | 455,000 | |||
| Income from operations | $ | 220,000 | |||
Problem 21-1A Part 1&2
Required: 1&2. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixed budget as variable or fixed.
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