Question

omework 6 Help Seven Submit Check my work 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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold $3,150.000 Direct materials $930,000 Direct labor 240,000 Machinery repairs (variable cost) 60,000 Depreciation Plant equipment 330,000 (straight-line) Utilities ($45,000 is variable) 195,000 Plant management salaries 190,000 1.945,000 1,205,000 Gross profit Selling expenses 75,000 Packaging 105,000 Shipping 235,000 415,000 Sales salary(fixed annual amount) General and administrative expenses 100,000 Advertising expense 230,000 415,000 85,000 Salaries $ 375,000 Entertainment expense Income from operations 78 of 8 Next > < Prev Search

Answer 1

Forecasted Contribution Margin Income Statement
			Increase/ (Decrease) in operating income
Sales [in units]	15000	18000
Contribution margin per unit	$                 113	$                113
Contribution margin	$     16,95,000	$    20,34,000	$       3,39,000
Fixed costs	$     13,20,000	$    13,20,000	$                    -
Operating income	$ 3,75,000	$    7,14,000	$       3,39,000
Increase in operating income
WORKINGS:
Total variable expenses:
Direct materials	$        9,30,000
Direct labor	$        2,40,000
Machinery repairs	$           60,000
Utilities	$           45,000
Packaging	$           75,000
Shipping	$        1,05,000
Total variable expenses	$    14,55,000
Variable expenses per unit = 1455000/15000 =	$ 97.00
Sales price per unit = 3150000/15000 =	$           210.00
Contribution margin per unit = 210-97 =	$           113.00
Total fixed costs:
Depreciation-Plant equipment	$        3,30,000
Utilities = 195000-45000 =	$        1,50,000
Plant management salaries	$        1,90,000
Sales salary	$        2,35,000
General and administrative expenses	$        4,15,000
Total fixed costs	$     13,20,000
Total expenses	$     27,75,000