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.
PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 |
|||||
Sales | $ | 3,150,000 | |||
Cost of goods sold | |||||
Direct materials | $ | 900,000 | |||
Direct labor | 210,000 | ||||
Machinery repairs (variable cost) | 60,000 | ||||
Depreciation—Plant equipment (straight-line) | 300,000 | ||||
Utilities ($45,000 is variable) | 195,000 | ||||
Plant management salaries | 190,000 | 1,855,000 | |||
Gross profit | 1,295,000 | ||||
Selling expenses | |||||
Packaging | 75,000 | ||||
Shipping | 90,000 | ||||
Sales salary (fixed annual amount) | 235,000 | 400,000 | |||
General and administrative expenses | |||||
Advertising expense | 100,000 | ||||
Salaries | 230,000 | ||||
Entertainment expense | 90,000 | 420,000 | |||
Income from operations | $ | 475,000 | |||
Problem 23-1A Part 4
4. An unfavorable change in business is
remotely possible; in this case, production and sales volume for
2017 could fall to 12,000 units. How much income (or loss) from
operations would occur if sales volume falls to this level?
(Enter any loss with minus sign.)
Forecasted Contribution Margin Income Statement | ||
For the year ended December 31,2017 | ||
Sales (in units) | 15000 | 12000 |
Contribution margin (per unit) | 118 | 118 |
Contribution margin | 1770000 | 1416000 |
Fixed costs | (1295000) | (1295000) |
Operating income | 475000 | 121000 |
Workings: | ||
Variable Amount per Unit | Total Fixed Cost | |
Sales | 210 | |
Variable costs: | ||
Direct materials | 60 | |
Direct labor | 14 | |
Machinery repairs | 4 | |
Utilities | 3 | |
Packaging | 5 | |
Shipping | 6 | |
Total variable costs | 92 | |
Contribution margin | 118 | |
Fixed costs | ||
Depreciation—Plant equipment | 300000 | |
Advertising expense | 100000 | |
Entertainment expense | 90000 | |
Plant management salaries | 190000 | |
Utilities | 150000 | |
Sales salary | 235000 | |
Salaries | 230000 | |
Total fixed costs | 1295000 |
Phoenix Company’s 2017 master budget included the following fixed budget report. It is based on an expected production a...
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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 3,150,000 Cost of goods sold Direct materials $ 900,000 Direct labor 210,000 Machinery repairs (variable cost) 60,000 Depreciation—Plant equipment (straight-line) 300,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 190,000 1,855,000 Gross profit 1,295,000 Selling expenses Packaging 75,000 Shipping 90,000 Sales salary (fixed...
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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 3,150,000 Cost of goods sold Direct materials $ 900,000 Direct labor 210,000 Machinery repairs (variable cost) 60,000 Depreciation—Plant equipment (straight-line) 300,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 190,000 1,855,000 Gross profit 1,295,000 Selling expenses Packaging 75,000 Shipping 90,000 Sales salary (fixed...
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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 3,000,000 Cost of goods sold Direct materials $ 945,000 Direct labor 240,000 Machinery repairs (variable cost) 60,000 Depreciation—Plant equipment (straight-line) 315,000 Utilities ($30,000 is variable) 195,000 Plant management salaries 220,000 1,975,000 Gross profit 1,025,000 Selling expenses Packaging 90,000 Shipping 105,000 Sales salary (fixed...
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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 3,000,000 Cost of goods sold Direct materials $ 945,000 Direct labor 240,000 Machinery repairs (variable cost) 60,000 Depreciation—Plant equipment (straight-line) 315,000 Utilities ($30,000 is variable) 195,000 Plant management salaries 220,000 1,975,000 Gross profit 1,025,000 Selling expenses Packaging 90,000 Shipping 105,000 Sales salary (fixed...
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 $975,000 Direct labor 225,000 Machinery repairs (variable cost) 45,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities ($60,000 is variable) 210,000 Plant management salaries 200,000 Gross profit Selling expenses Packaging 90,000 Shipping 90,000 Sales salary (fixed annual amount) 235,000 General...
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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 $3,150,000 $960,000 225.000 45.000 300,000 195.000 180,000 1,905,000 1.225.000 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...
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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 3,150,000 Cost of goods sold Direct materials $ 915,000 Direct labor 210,000 Machinery repairs (variable cost) 45,000 Depreciation—Plant equipment (straight-line) 330,000 Utilities ($60,000 is variable) 195,000 Plant management salaries 200,000 1,895,000 Gross profit 1,255,000 Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed...
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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $ 3,000,000 Cost of goods sold Direct materials $ 945,000 Direct labor 240,000 Machinery repairs (variable cost) 60,000 Depreciation—Plant equipment (straight-line) 315,000 Utilities ($30,000 is variable) 195,000 Plant management salaries 220,000 1,975,000 Gross profit 1,025,000 Selling expenses Packaging 90,000 Shipping 105,000 Sales salary (fixed...
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 $960,000 Direct labor 225,000 Machinery repairs (variable cost) 45,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 180,000 Gross profit Selling expenses Packaging 90,000 Shipping 90,000 Sales salary (fixed annual amount) 235,000 General...
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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 $3,150,000 Sales Cost of goods sold Direct materials $960,000 225,000 45,000 300,000 195,000 180,000 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...