All one problem Problem 21-1A Preparation and analysis of a flexible budget LO P

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All one problem

Problem 21-1A Preparation and analysis of a flexible budget LO P1 [The following information applies to the questions displayed below. Phoenix Company's 2015 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, 2015 $ 3,150,000 Sales Cost of goods sold $915,000 Direct materials Direct labor Machinery repairs (variable cost) 240,000 45,000 315 195,000 200,000 t equipment (straight-line) Utilities ($45,000 is variable) Plant management salaries 1,910,000 Gross profit Selling expenses 1,240,000 Packaging Shipping Sales salary (fixed annual amount) 90,000 90,000 235,000 415,000 General and administrative expenses Advertising expense Salaries 125,000 230,000 80,000 435,000 Income from operations $390,000

Explanation / Answer

FLEXIBLE BUDGET FLEXIBLE BUDGET VC PER UNIT FIXED 14000 UNITS 16000 UNITS Sales Variable Cost: Material 61 854000 976000 Labour 16 224000 256000 machinery repairs 3 42000 48000 Utilities 3 42000 48000 Packaging 6 84000 96000 Shipping 6 84000 96000 Total Variable cost 95 1,330,000 1,520,000 Fixed cost: Depreciation-Plant Equipment 315000 315000 315000 utilities 150000 150000 150000 Plant management salaries 200000 200000 200000 Sales salaries 235000 235000 235000 Advertisement 125000 125000 125000 salaries 230000 230000 230000 Entertainment expense 80000 80000 80000 Total Fixed cost 1,335,000 1,335,000 1,335,000 Total Cost 2,665,000 2,855,000

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