Question

Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 16,000 units. $3,600,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales Cost of goods sold Direct materials $800,000 Direct labor 240,000 Machinery repairs (variable cost) 64,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities ($48,000 is variable) 198,000 Plant management salaries 215,000 Gross profit Selling expenses Packaging 80,000 Shipping 112,000 Sales salary (fixed annual amount) 260,000 General and administrative expenses Advertising expense 131,000 Salaries 251,000 Entertainment expense 90,000 Income from operations 1,832,000 1,768,000 452,000 472,000 844,000 $

Please provide the same tables. Thanks

Answer 1

	Phoenix Company
	Fixed Budget Report
	For Year ended for December 31, 2017
		Flexible Budget	Actual Results	Variances	Fav / Unfav
(i)	Sales	$   42,75,000	$         43,53,000	$              78,000	Fav
	Variable Costs:
	Direct material	$      9,50,000	$            9,66,000	$              16,000	Unfav
	Direct labor	$      2,85,000	$            2,94,000	$                9,000	Unfav
	Machinery repairs (Variable cost)	$         76,000	$               68,000	$                8,000	Fav
	Utilities	$         57,000	$               56,250	$                    750	Fav
	Packaging	$         95,000	$               92,750	$                2,250	Fav
	Shipping	$      1,33,000	$            1,25,500	$                7,500	Fav
(ii)	Total Variable costs	$   15,96,000	$         16,02,500	$                6,500	Unfav
(iii)	Contribution margin (i) - (ii)	$   26,79,000	$         27,50,500	$              71,500	Fav
	Fixed costs:
	Depreciation - Plant Equipment	$      3,15,000	$            3,15,000	$                       -	None
	Utilities	$      1,50,000	$            1,48,000	$                2,000	Fav
	Plant manager salary	$      2,15,000	$            2,25,000	$              10,000	Unfav
	Sales Salary	$      2,60,000	$            2,78,000	$              18,000	Unfav
	Advertising Expense	$      1,31,000	$            1,39,000	$                8,000	Unfav
	Salaries	$      2,51,000	$            2,51,000	$                       -	None
	Entertainment Expense	$         90,000	$               93,500	$                3,500	Unfav
(iv)	Total Fixed Costs (iii) - (iv)	$   14,12,000	$         14,49,500	$              37,500	Unfav
	Income from Operations	$   12,67,000	$         13,01,000	$              34,000	Fav
	Workings:
	Phoenix Company
	Fixed Budget Report
	For Year ended for December 31, 2017
		Flexible Budget		Flexible Budget for
		Variable amount per unit	Total Fixed cost	19,000 units
		(a)		[(a) X 19,000]
(i)	Sales ($3600,000/16,000)	$               225		$        42,75,000
	Variable Costs:
	Direct material ($800,000/16,000)	$                  50		$          9,50,000
	Direct labor ($240,000/16,000)	$                  15		$          2,85,000
	Machinery repairs (Variable cost) ($64,000/16,000)	$                    4		$              76,000
	Utilities ($48000/16,000)	$                    3		$              57,000
	Packaging ($80,000/16,000)	$                    5		$              95,000
	Shipping ($112,000/16,000)	$                    7		$          1,33,000
(ii)	Total Variable costs			$        15,96,000
(iii)	Contribution margin (i) - (ii)			$        26,79,000
	Fixed costs:
	Depreciation - Plant Equipment		$            3,15,000	$          3,15,000
	Utilities		$            1,50,000	$          1,50,000
	Plant manager salary		$            2,15,000	$          2,15,000
	Sales Salary		$            2,60,000	$          2,60,000
	Advertising Expense		$            1,31,000	$          1,31,000
	Salaries		$            2,51,000	$          2,51,000
	Entertainment Expense		$               90,000	$              90,000
(iv)	Total Fixed Costs (iii) - (iv)		$         14,12,000	$        14,12,000
	Income from Operations			$        12,67,000