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 $3,150.000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 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 $ 960, een 210,000 45,000 330,000 210,000 200,000 1.955.000 1.195.000 90,000 90.000 235,000 415,000 125,000 230,000 85,000 440,000 0.000

Answer 1

Answer 1 and 2.

Flexible Budget for: PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Flexible Budget Variable Total Fixed Amount per Cost unit 210.00 Unit Sales of Unit Sales of 14000 16000 2940000 3360000 64.00 14.00 3.00 3.00 6.00 6.00 96.00 114.00 896000 196000 42000 42000 84000 84000 1344000 1596000 1024000 224000 48000 48000 96000 96000 1536000 1824000 Sales Variable Costs: Direct Materials Direct Labor Machinery Repairs Utilities Packaging Shipping Total Variable Costs Contribution Margin Fixed Costs: Depreciation-Plant Equipment Utilities Plant Management Salaries Sales Salary Advertising Salaries Entertainment Expense Total Fixed Costs Income from Operations 330000 165000 200000 235000 125000 230000 85000 1370000 330000 165000 200000 235000 125000 230000 85000 1370000 226000 330000 165000 200000 235000 125000 230000 85000 1370000 454000

Answer 3.

PHOENIX COMPANY Forecasted Contribution Margin Income Statement For the Year Ended December 31, 2017 Sales (in units) 15000 18000 Contribution margin (per unit) 114.00 114.00 Contribution margin 1710000 2052000 Fixed costs 1370000 1370000 Expected increase in operating income 1 340000 682000 342000

Answer 4.

PHOENIX COMPANY Forecasted Contribution Margin Income Statement For the Year Ended December 31, 2017 Sales (in units) 15000 12000 Contribution margin (per unit) 114.00 114.00 Contribution margin 1710000 1368000 Fixed costs 1370000 1370000 Expected increase in operating income 340000 -2000

Planning Budget:

Selling Price per unit = Sales / Sales Volume
Selling Price per unit = $3,150,000 / 15,000
Selling Price per unit = $210.00

Direct Materials per unit = Direct Materials / Sales Volume
Direct Materials per unit = $960,000 / 15,000
Direct Materials per unit = $64.00

Direct Labor per unit = Direct Labor / Sales Volume
Direct Labor per unit = $210,000 / 15,000
Direct Labor per unit = $14.00

Machinery Repairs per unit = Machinery Repairs / Sales Volume
Machinery Repairs per unit = $45,000 / 15,000
Machinery Repairs per unit = $3.00

Utilities per unit = Utilities / Sales Volume
Utilities per unit = $45,000 / 15,000
Utilities per unit = $3.00

Packaging per unit = Packaging / Sales Volume
Packaging per unit = $90,000 / 15,000
Packaging per unit = $6.00

Shipping per unit = Shipping / Sales Volume
Shipping per unit = $90,000 / 15,000
Shipping per unit = $6.00