Question

Required information (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. $3,000,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales Cost of goods sold Direct materials $975,000 Direct labor 225,000 Machinery repairs (variable cost) 60,000 Depreciation,Plant equipment (straight-line) 300,000 Utilities ($ 45,000 is variable) 195,000 Plant management salaries 200,000 Gross profit Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed annual amount) 250,000 General and administrative expenses Advertising expense 125,000 Salaries 241,000 Entertainment expense 90,000 Income from operations 1,955,000 1,045,000 430,000 456,000 159,000 $

Answer 1

PHOENIX COMPANY Fixed Budget Report For year Ended December 31, 2017 Flexible Budget Flexible Budget For Unit sales of 16000 Variable Amount per unit Total Fixed Costs Units sales of 14000 Sales 200 2800000 3200000 Variable costs: Direct materials Direct labor Machine repairs 910000 65 1040000 15 210000 240000 4 56000 64000 Utilities 3 42000 48000 Packaging Shipping 5 70000 80000 98000 112000 Total Variable costs 1386000 99 1584000 Contribution margin 101 1414000 1616000

Fixed costs: Depreciation Plant equipment 300000 300000 300000 Utilities 150000 150000 150000 Plant management salaries Sales salary Advertising Salaries Entertainment expense 200000 200000 200000 250000 250000 250000 125000 125000 125000 241000 241000 241000 90000 90000 90000 Total Fixed costs Income from operations 1356000 1356000 1356000 260000 58000