Refer to the information in Problem 23-1B. Tohono Company's actual income statement for 2017 follows TOHONO COMPANY Statement of Income from Operations For Year Ended December 31, 2017 $3,648,000 Sales (24,000 units) Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation--Machinery Utilities (variable cost, $64,000) Plant manager salaries $1,400,000 360,000 60,000 250,000 218,000 155,000 2,443,000 1,205,000 Gross profit Selling expenses Packaging Shipping Sales salary (annual) 90,000 124,000 162,000 376,000 General and administrative expenses Advertising expense Salaries Entertainment expense 104,000 232,000 100,000436,000 Income from operations $393,000 Requirec 1. Prepare a flexible budget performance report for 2017. Check (1) Variances: Fixed costs, $45,000 U; Income, $20,600 F Analysis Component 2. Analyze and interpret both the (a) sales variance and (b) direct materials cost variance. Problem 23-1B Preparation and analysis of a flexible budget P1A1 Tohono Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 20,000 units TOHONO COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $3,000,000 Cost of goods sold $1,200,000 260,000 57,000 Depreciation-Machinery (straight-line) 250,000 200,000 Direct materials Direct labor Machinery repairs (variable cost) Utilities (25% is variable cost) Plant manager salaries 140,000 _2.107,000 893,000 Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) 80,000 116,000 160.000 356,000 General and administrative expenses Advertising Salaries Entertainment expense 81,000 241,000 90,000 412,000 S 125,000 Income from operations