Question

Chap 21 Homework 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 $3,300,000 Part 1 of 3 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment straight-line) Utilities (530,000 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 $ 930,000 225,000 60,000 330,000 180,000 210,000 Doints 1,935,000 1,365,000 Skipped 75,000 105,000 235,000 415,000 eBook Print 150,000 241,000 85,000 References 476,000 474,000 $ Required: 18 2. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixed budget as variable or fixed. PHOENIX COMPANY Flexible Budgets

Answer 1

	flexible budget		flexible budget for
	variable amount per unit	total fixed cost	units sales of 14000	units sales of 16000
sales @$220			3080000	3520000
variable costs
direct material	$                                            62		$                     8,68,000	$                      9,92,000
direct labour	$                                            15		$                     2,10,000	$                      2,40,000
machinery repairs	$                                              4		$                         56,000	$                         64,000
utilities	$                                              2		$                         28,000	$                         32,000
packaging	$                                              5		$                         70,000	$                         80,000
shipping	$                                              7		$                         98,000	$                      1,12,000
total variable expenses	$                                            95		$                   13,30,000	$                   15,20,000
contribution			$                   17,50,000	$                   20,00,000
Fixed costs
depreciation		$            3,30,000	$                     3,30,000	$                      3,30,000
utilities		$            1,50,000	$                     1,50,000	$                      1,50,000
plant management salary		$            2,10,000	$                     2,10,000	$                      2,10,000
sales salary		$            2,35,000	$                     2,35,000	$                      2,35,000
advertising expense		$            1,50,000	$                     1,50,000	$                      1,50,000
admin salary		$            2,41,000	$                     2,41,000	$                      2,41,000
entertainment expense		$                85,000	$                         85,000	$                         85,000
total fixed expenses		$          14,01,000	$                   14,01,000	$                   14,01,000
profit			$                     3,49,000	$                      5,99,000