Question

Requlred Information Problem 23-1A Preparation and anelysls of a flexible budget LO P1 The following information appies to the questions displayed below Phoenix Company's 2017 master budget included the tolowing txed budget report Itis based on an expected product meny z7 mumier enge ntedudce e and sales volume of 15,000 units. PK ENIX C Fixed Budget Repart fon rear Ended Decenber 31, 2817 sales cost of goods sold $3,158,888 irect materials Direct labor kachinery repairs (variable cost) Depreciation- Plant equipnent (straight-line) utilities (sa5,ee0 is variable) Plant nanagenent salaries $ 938,00e 225,008 45,889 315,880 195, eee Grass profit Selling expenses 218,ee8 1,92e,eee 1,23e,ee0 Packagin Shipping Sales salary (fixed annual amount) 75,8e9 185,8e0 235,688415,96e General änd administrative expenses Advertising expense salaries Entertainment expenss 125,ee9 23e eee 440,800 85,e88440,8ee Incone from operations 375,88e Problem 23-1A Part 182 Required: 18.2. Prepare flexible budgets fo budget as variable or fixed. 182. Prepare fexible budgets for the company at sales volumes of 14,000 and 16,000 units and classity al l tems isted in the t

Answer 1

18.2)

PHOENIX COMPANY
Fixed Budget Report
For the Year Ended December 31,2017
	Flexible Budget		Flexible Budget for:
	Variable Amount per unit	Total Fixed Cost	Units sales of 14,000	Units sales of 16,000
Sales	$                                        210.00		$                2,940,000.00	$                3,360,000.00
Variable Costs
Direct Material	$                                          62.00		$                    868,000.00	$                    992,000.00
Direct Labor	$                                          15.00		$                    210,000.00	$                    240,000.00
Machinery Repair	$                                            3.00		$                      42,000.00	$                      48,000.00
Utilities	$                                            3.00		$                      42,000.00	$                      48,000.00
Packaging	$                                            5.00		$                      70,000.00	$                      80,000.00
Shipping	$                                            7.00		$                      98,000.00	$                    112,000.00
Total Variable Costs	$                                          95.00		$                1,330,000.00	$                1,520,000.00
Contribution Margin	$                                        115.00		$                1,610,000.00	$                1,840,000.00
Fixed Costs
Depreciation-Plant Equipment		$            315,000.00	$                    315,000.00	$                    315,000.00
Utilities		$            150,000.00	$                    150,000.00	$                    150,000.00
Plant Management Salaries		$            210,000.00	$                    210,000.00	$                    210,000.00
Sales Salary		$            235,000.00	$                    235,000.00	$                    235,000.00
Advertising Expense		$            125,000.00	$                    125,000.00	$                    125,000.00
Salaries		$            230,000.00	$                    230,000.00	$                    230,000.00
Entertainment Expense		$              85,000.00	$                      85,000.00	$                      85,000.00
			$                                      -	$                                      -
Total Fixed Cost		$        1,350,000.00	$                1,350,000.00	$                1,350,000.00
Income from Operations			$                    260,000.00	$                    490,000.00

Part 3)

PHOENIX COMPANY
Forecasted Contribution Margin Income Statement
For the Year Ended December 31,2017
Sales( In units)	15,000.00	18,000.00
Contribution Margin (Per unit)	$              115.00	$              115.00
Contribution Margin	$ 1,725,000.00	$ 2,070,000.00
Fixed Costs	$ 1,350,000.00	$ 1,350,000.00
Operating Income	$      375,000.00	$      720,000.00	$ 345,000.00	Operating Income Increase

Part4 )

PHOENIX COMPANY
Forecasted Contribution Margin Income Statement
For the Year Ended December 31,2017
Sales( In units)	15,000.00	12,000.00
Contribution Margin (Per unit)	$              115.00	$              115.00
Contribution Margin	$ 1,725,000.00	$ 1,380,000.00
Fixed Costs	$ 1,350,000.00	$ 1,350,000.00
Operating Income	$      375,000.00	$        30,000.00