Question

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 $3,150,000 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 ($30,000 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 $ 960,000 210.000 60,000 315.000 195,000 210,000 1,950, see 1,200,000 75,000 90,000 235,000 400,000 100,000 230,000 80,000 410,000 390.000 $ Required: 182. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixe budget as variable or fixed. < Prev 2 8 4 of 5 # Next >

Answer 1

Answer:

Phoenix Company
Fixed Budget Report
For year ended December 31, 2015
		Flexible Budget		Flexible Budget for
	Calculation	Variable Amount per Unit	Total Fixed Cost	Unit Sales of 14,000	Unit Sales of 16000
Sales	31,50,000/15000	210		29,40,000	33,60,000
Variable Cost
Direct materials	=960000/15000	64		8,96,000	10,24,000
Direct labor	=210000/15000	14		1,96,000	2,24,000
Machinery repairs	=60000/15000	4		56,000	64,000
Utilities (30,000 is variable)	=30000/15000	2		28,000	32,000
Packaging	=75000/15000	5		70,000	80,000
Shipping	=90000/15000	6		84,000	96,000
Total variable cost		95		13,30,000	15,20,000
Contribution margin		115		16,10,000	18,40,000
Fixed cost
Depreciation - plant equipment (straight line)			3,15,000	3,15,000	3,15,000
Utilities (180,000 - 30,000)	195000-30000		1,65,000	1,65,000	1,65,000
Plant management salaries			2,10,000	2,10,000	2,10,000
Sales salary			2,35,000	2,35,000	2,35,000
Advertising expense			1,00,000	1,00,000	1,00,000
Salaries			2,30,000	2,30,000	2,30,000
Entertainment expense			80,000	80,000	80,000
Total fixed costs			13,35,000	13,35,000	13,35,000
Income from operations				2,75,000	5,05,000