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. ed December 31, 2017 $3,300,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 312017 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 45,000 300,000 195.000 220,000 1,885,000 1.415.000 90.000 105,000 235,000 430,000 125.000 230.000 85,000 440,000 545,000 < Prev 3 4 5 of 5 Next > arch

Answer 1

	PHOENIX COMPANY
	Fixed Budget Report
	For Year Ended December 31, 2017
	Flexible Budget		Flexible Budget for:
	Variable Amount per Unit	Total Fixed Cost	Units Sales of 14,000	Unit Sales of 16,000
Sales	220		3080000	3520000
Variable costs:
Direct materials	61		854000	976000
Direct labor	14		196000	224000
Machinery repairs	3		42000	48000
Utilities	3		42000	48000
Packaging	6		84000	96000
Shipping	7		98000	112000
Total variable costs	94		1316000	1504000
Contribution margin	126		1764000	2016000
Fixed costs
Depreciation—Plant equipment (straight-line)		300000	300000	300000
Advertising expense		125000	125000	125000
Entertainment expense		85000	85000	85000
Plant management salaries		220000	220000	220000
Utilities		150000	150000	150000
Sales salary		235000	235000	235000
Salaries		230000	230000	230000
Total fixed costs		1345000	1345000	1345000
Income from operations			419000	671000
3
Forecasted Contribution Margin Income Statement
For Year ended December 31,2017
Sales (in units)	15000	18000
Contribution margin (per unit)	126	126
Contribution margin	1890000	2268000
Fixed costs	1345000	1345000
Operating income	545000	923000	378000	Operating income increase
4
Forecasted Contribution Margin Income Statement
For Year ended December 31,2017
Sales (in units)	15000	12000
Contribution margin (per unit)	126	126
Contribution margin	1890000	1512000
Fixed costs	1345000	1345000
Operating income(loss)	545000	167000