Question

Required information Problem 21-1A Preparation and analysis of a flexible budget LO P1 [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 ($45,000 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 $ 915,000 210,000 60,000 300,000 195,000 200,000 1,880,000 1,270,000 90,000 90,000 235,000 415,000 100,000 230,000 80,000 410,000 445,000 $ Problem 21-1A Part 1&2

Answer 1

Flexible Budget Variable Amount per unit) Total Fixed Costs Flexible Budget For Units sales of 14000 Unit sales of 16000 2940000 3360000 210 Sales Variable costs: Direct materials Direct labor Machine repairs Utilities Packaging Shipping 854000 196000 56000 42000 84000 84000 976000 224000 64000 48000 96000 96000 1316000 1624000 1504000 1856000 116 Total Variable costs Contribution margin Fixed costs: Depreciation Plant equipment Utilities Plant management salaries Sales salary Advertising Salaries Entertainment expense 300000 150000 200000 235000 100000 230000 300000 150000 200000 235000 100000 230000 80000 300000 150000 200000 235000 100000 230000 80000 80000 1295000 Total Fixed costs Income from operations 1295000 329000 1295000 561000