Problem 23-2A Preparation and analysis of a flexible budget performance report LO P1, P2, A1

Phoenix Companys 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 18,000 units.

PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017
Sales				$	4,050,000
Cost of goods sold
Direct materials	$	1,080,000
Direct labor		270,000
Machinery repairs (variable cost)		72,000
DepreciationPlant equipment (straight-line)		315,000
Utilities ($54,000 is variable)		214,000
Plant management salaries		230,000			2,181,000
Gross profit					1,869,000
Selling expenses
Packaging		90,000
Shipping		126,000
Sales salary (fixed annual amount)		270,000			486,000
General and administrative expenses
Advertising expense		126,000
Salaries		251,000
Entertainment expense		100,000			477,000
Income from operations				$	906,000

Phoenix Companys actual income statement for 2017 follows.

PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017
Sales (21,000 units)				$	4,788,000
Cost of goods sold
Direct materials	$	1,276,000
Direct labor		324,000
Machinery repairs (variable cost)		75,000
DepreciationPlant equipment (straight-line)		315,000
Utilities (fixed cost is $158,000)		220,250
Plant management salaries		241,000			2,451,250
Gross profit					2,336,750
Selling expenses
Packaging		102,750
Shipping		139,000
Sales salary (annual)		286,000			527,750
General and administrative expenses
Advertising expense		135,000
Salaries		251,000
Entertainment expense		104,000			490,000
Income from operations				$	1,319,000

Required: 1. Prepare a flexible budget performance report for 2017.

+ My Blackboard Content-Blackb Chapter 23 HOMEWORK p28 Get Homework Help With ChegX Problem 23-2A preparation And https:/ewconnect.mheducati Chapter 23 - HOMEWORK - p284 6 Saved Help Save & Exit Submit Check my work 1 Sales $ 4,788,000 avorable Variable costs 1,276,000 324,000 75,000 160,000 102,750 139,000 Direct materials Direct labor Machinery repairs Utilities Packaging Shipping avorable 50 points nfavorable avorable Favorable Favorable Favorable Ask otal variable costs Contribution margin Fixed costs 2,076,750 nfavorable Favorable Depreciation-Plant equipment (straight-line) 315,000 160,000 230,000 270,000 126,000 251,000 100,000 315,000 158,000 241,000 286,000 135,000 251,000 104,000 2.000 Favorable 11,000 Unfavorable 16,000 Unfavorable 9,000 Unfavorable Plant management salaries Sales salary Advertising expense Salaries Entertainment expense variance 4.000 Unfavorable 742 PM 4/17/2019 O Type here to search 2,076,750 otal variable costs Contribution margin Fixed costs Unfavorable Favorable Depreciation-Plant equipment (straight-line) Utilities Plant management salaries Sales salary Advertising expense Salaries Entertainment expense 315,000 160,000 230,000 270,000 126,000 251,000 100,000 315,000 158,000 241,000 286,000 135,000 251,000 104,000 No variance 2,000 Favorable 11,000 Unfavorable 16,000 Unfavorable 9,000 Unfavorable No variance 4,000 Unfavorable Total fixed costs 1,452,000 1,490,000 38,000 Unfavorable $ 1,319,000 Income from operations Favorable