Problem 8-2A 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 15,000 units. $3,000,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 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 2017 follows. $3,648,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (18,000 unita) 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 2,236,500 1, 411, 500 87,500 118,500 268,000 474 ,000 DS Packaging Shipping Sales salary (annual) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations 132,000 241,000 93,500 466,500 $ 471.000 Required: 1. Prepare a flexible budget performance report for 2017 PHOENIX COMPANY PHOENIX COMPA 1 - 1 Flexible Budget Performance Report For Year Ended December 31, 2017 Flexible Budget Actual Results Variances Fav. / Unfav. Sales S 3,600,000 Favorable Variable costs Direct materials KASSARAREA REBREAN N Unfavorable Direct labor 270,000 B S Unfavorable Machinery repairs 72,000 ARASAAC Favorable Utilities 54,000A A RNA Packaging 90,000ER A RE NERE Favorable Shipping S 126,000 118,500 7,5 REN C O MMENTS 612,000 118,500 LANGAN RRA Fixed costs TIT 1 TE 1 1 1 ULIT RRA RONANERALITAT C ANCER THE CE ANA PETIT TETET 1. Prepare a flexible budget performance report for 2017 PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 Flexible Budget Actual Results $ 3,600,000 Variances Fav. / Unfav. Favorable 2 Sales Variable costs Direct materials Direct labor Machinery repairs Utilities Packaging Shipping 11 70,000 72,000 54,000 90,000 126,000 Unfavorable Unfavorable Favorable Favorable Favorable 7,500 Favorable A DSET 118,500 HE IT IT | 1 TT TT I TIL | | 612,000 118,500 Fixed costs TIT AN SES