Problem 23-2A Preparation and analysis of a flexible budget performance report LO P1, P2, A1 Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 17,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 $3,825,000 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($34,000 is variable) Plant management salaries $850, 000 255,000 51,000 315,000 184,00 200,000 1,855,000 1,970,000 Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) 68,000 102,000 260,000 430,000 General and administrative expenses Advertising expense Salaries Entertainment expense 129,000 251,000 100,000 480,000 $1,060,000 Income from operations Phoenix Company's actual income statement for 2017 follows. PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 $4,578,000 Sales (20,000 units) Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities (fixed cost is $147,500) Plant management salaries $1,017,000 309,000 52,000 315,000 186,750 211,000 2,090,750 2,487,250 Gross profit Selling expenses Packaging Shipping Sales salary (annual) 77,500 112,500 277,000 467,000 General and administrative expenses Advertising expense Salaries Entertainment expense 136,000 251,000 103,000490,000 Income from operations $1,530,250