! Required information Problem 21-1A Preparation and analysis of a flexible budget LO P1 (The following information applies to the questions displayed below.) 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. $3,150,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($30,000 is variable) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed amount) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations $ 975,000 225,000 45,000 330,000 195,000 210,000 1,980,000 1,170,000 90,000 90,000 235,000 415,000 150,000 230,000 80,000 460,000 $ 295,000 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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Flexible Budget Variable Amount Total Fixed Cost Flexible Budget for: Units Sales Unit Sales of of 14,000 16,000 per Unit Variable costs 0.00 0 0 Fixed costs $ 0 $ 0 $ 0 Exercise 21-11 Direct materials and direct labor variances LO P2 Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (14 lbs. @ $4 per lb.) Direct labor (3 hrs. @ $14 per hr.) $56 42 During May the company incurred the following actual costs to produce 8,300 units. Direct materials (118,700 lbs. @ $3.80 per lb.) Direct labor (28,200 hrs. @ $14.10 per hr.). $451,060 397,620 AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances and classify it as favorable or unfavorable. Actual Cost Standard Cost Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2. Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable. Actual Cost Standard Cost
