Xion Co. budgets a selling price of $80 per unit, variable costs of $35 per unit, and total fixed costs of $275,000. During June, the company produced and sold 11,300 units and incurred actual variable costs of $356,000 and actual fixed costs of $290,000. Actual sales for June were $935,000. Prepare a flexible budget report showing variances between budgeted and actual results. List variable and fixed expenses separately. (Indicate the effect of each varlance by selecting for favorable, unfavorable, and no varlance) XION CO. Flexible Budget Report For Month Ended June 30 Flexible Budget Actual Results S 904,000 395,500 Variances Fav./Unf. Sales Variable expenses Contribution margin Fixed expenses Income from operations 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. $3,800, 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 ($45,000 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 $ 960, eee 210,000 60,000 315,000 210,000 190,000 1,945, eee 1,055, eee 75, eee 105,000 235,000 415, eee 125, eee 230,000 85,00 440, eee $ 200,000 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. Ye PHOENIX COMPANY Flexible Budgets Ended December 31, 2019 Flexible Budget Variable Amount Total Fixed Cost Flexible Budget for: Units Sales Unit Sales of of 14,000 16,000 Per Unit Variable costs Fixed costs 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
