Question

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fine rowowing informanon appoes to the questions displayed below! Phoenix Company's 2017 master budget included the following fired budget report is based on an expected product 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 240,000 Machinery repairs (variable cost) 45,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities (530,000 is variable) 180,000 Plant management salaries 210,000 Gross profit Selling expenses Packaging 90,000 Shipping 90,000 Sales salary (fixed annual amount) 235.000 General and administrative expenses Advertising expense 125.000 Salaries 230,000 Entertainment expense 30.000 Income from operations 1.950,000 1,050,000 415,000 435.000 $ 200,000 1 or 2 Next >

Answer 1

	Phoenix Company
	Fixed Budget Report
	For Year ended for December 31, 2017
		Flexible Budget		Flexible Budget for
		Variable amount per unit	Total Fixed cost	14,000 units	16,000 units
		(a)		[(a) X 14,000]	[(a) X 16,000]
(i)	Sales ($30,00,000/15,000)	$               200		$        28,00,000	$ 32,00,000
	Variable Costs:
	Direct material ($9,75,000/15,000)	$                  65		$          9,10,000	$ 10,40,000
	Direct labor ($2,40,000/15,000)	$                  16		$          2,24,000	$   2,56,000
	Machinery repairs (Variable cost) ($45,000/15,000)	$                    3		$              42,000	$       48,000
	Utilities ($30,000/15,000)	$                    2		$              28,000	$       32,000
	Packaging ($90,000/15,000)	$                    6		$              84,000	$       96,000
	Shipping ($90,000/15,000)	$                    6		$              84,000	$       96,000
(ii)	Total Variable costs			$        13,72,000	$ 15,68,000
(iii)	Contribution margin (i) - (ii)			$        14,28,000	$ 16,32,000
	Fixed costs:
	Depreciation - Plant Equipment		$            3,00,000	$          3,00,000	$   3,00,000
	Utilities		$            1,50,000	$          1,50,000	$   1,50,000
	Plant manager salary		$            2,10,000	$          2,10,000	$   2,10,000
	Sales Salary		$            2,35,000	$          2,35,000	$   2,35,000
	Advertising Expense		$            1,25,000	$          1,25,000	$   1,25,000
	Salaries		$            2,30,000	$          2,30,000	$   2,30,000
	Entertainment Expense		$               80,000	$              80,000	$       80,000
(iv)	Total Fixed Costs (iii) - (iv)		$         13,30,000	$        13,30,000	$ 13,30,000
	Income from Operations			$              98,000	$   3,02,000

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