Required information Problem 08-1A Preparing and analyzing a flexible budget LO P1, A1 [The following information applies to the questions displayed below) Phoenix Company's 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. $3,300,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) utilities (545,000 is variable) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations 5960,000 220,000 60,000 315,000 210,000 210,000 1,965,000 2,335,000 90,000 105,000 235,00 430,000 125,000 230,000 75,000 430, ce $ Problem 08-1A Part 1&2 475,000 Required: 182. 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 foced. PHOENIX COMPANY Flexible Budgets For Year Ended December 31, 2019 Flexible Budget Variable Amount Total Fixed per Unit Cost 210 00 Flexible Budget for Units Sales Unit Sales of of 14.000 16.000 $ 2940.000 $ 3.200.000 896,000 1,024 000 PION Problem 08-1A Part 1&2 Required: 182. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fi budget as variable or fixed. PHOENIX COMPANY Flexible Budgets For Year Ended December 31, 2019 Flexible Budget Variable Amount Total Fixed per Unit Cost Sales Variable costs Direct materials Flexible Budget for: Units Sales Unit Sales of of 14,000 16,000 5 2.940,000 $3,200,000 210.00 Direct labor 6400 Machinery Utilities Packaging Shipping 896,000 196,000 42.000 42.000 84.000 98,000 1.024.000 224 000 48,000 48,000 96.000 112,000 1.358,000 Total variable costs Contribution margin Fixed costs Depreciation Plant equipment straight line) Plant management salaries Utilities Sales salary Advertising expense Salaries Entertain 1.552,000 15.000 150,000 190.000 235.000 100 000 230,000 SO 000 315.000 150,000 190.000 235.000 100 000 230.000 315,000 150,000 190,000 235.000 100,000 230,000 90.000 Totaled costs 90.000 $ 1.310.000 $ 1.310.000 $ 1310 000 Shnual amount) tral and ministrative expenses Advertising expense Salaries Entertainment expense Income from operations 90,000 105,000 235,000 430,000 125,000 230,000 75,000 $ 430,000 475,000 Problem 08-1A Part 3 3. The company's business conditions are improving One possible result is a sales volume of 18,000 units. The company president is confident that this volume is within the relevant range of existing capacity. How much would operating income increase over the budgeted amount of $475.000 If this level is reached without increasing capacity? budgeted amount of $475.000 if the relevant range of existing capacity How volume of 18.000 units. The company Sales ) Contribution margine Contribution margin PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 15000 ) Opet income Income from operations 125,000 230,000 75,000 $ 430.000 475,000 Problem 08-1A Part 4 4. An unfavorable change in business is remotely possible, in this case, production and sales volume for the year could fall to 12,000 units. How much income for loss) from operations would occur if sales volume falls to this level? (Enter any loss with minus sign.) PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 Sales in uns 15.000 Contribution margin (per unit) Contribution margin Foxed costs Operating income loss)
