Required Information [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,eee, eee 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 ($45,eee 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 $ 950,000 21e, eee 60,000 315,000 210, Bee 190,000 1,945,600 1,855,600 75,880 105,000 235,800 415,800 125, eee 230, eee 85,000 440,000 $ 280,00 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 $200.000 if this level is reached without increasing capacity? PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 Sales in units) 15,000 18,000 Contribution margin (per unit) Contribution margin Faced costs Operating income Arctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report only includes those costs that the particular department manager can controls raw materials, wages, supplies used, and equipment depreciation. Raw materials Employee wages Dept. manager salary Supplies used Depreciation-Equip. Utilities Rent Totals Snowmobile $ 20,590 11,500 5,400 4,510 7,100 470 6,800 $56, 370 Budget ATV $28,600 21,600 6,300 2,800 13,600 650 7,400 $80,150 Combined $ 49,190 33,100 11,700 6,510 20,700 1, 12e 14,200 $136,52 Snowmobile $20,520 11,870 5,500 4,270 7,100 440 6,400 $ 56,100 Actual ATV Combined $29,920 $ 50,440 22,340 34,210 5,500 11,00 2,e2e 6,290 13,600 20,700 610 1,050 7,400 13,800 $81, 390 $137,490 Prepare a responsibility accounting report for the snowmobile department. (Under budget amounts should be Indicated by a minus slgn.) Responsibility Accounting Performance Report Dept. Manager, Snowmobile Department For the Year Budgeted Amount Actual Amount Over (Under) Budget Controllable Costs Raw materials Employee wages Supplies used Depreciation-Equipment Totals Required Information [The following information applies to the questions displayed below.] A food manufacturer reports the following for two of its divisions for a recent year. ($ millions) Invested assets, beginning Invested assets, ending Sales Operating income Beverage Division $2,685 2,685 2,693 361 Cheese Division $4,480 4,412 3,937 646 Assume that each of the company's divisions has a required rate of return of 8%. Compute residual income for each division (Enter your answers in millions.) ($ millions) Beverage Cheese Targeted return Target income Residual Income Beverage Cheese Residual income
