Phoenix Company\'s 2015 master budget included the following fixed budget report
ID: 2551096 • Letter: P
Question
Phoenix Company's 2015 master budget included the following fixed budget report It is based on an expected production and soles volume of 15,000 units. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2015 $ 3.300,000 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-plant equipment (straight-line) Utilities ($60,000 is variable) Plant monagement salories $ 915,000 240,000 60,000 330,000 210,000 190,000 945,000 Gross profit Selling expenses 1355,000 Packaging Shipping Sales salary (fixed annual amount) 75,000 105,000 235,000 415,000 General and administrative expenses Advertising expense Salaries Entertainment expense 125,000 230,000 80,000 435,000 Income from operations $ 505,000Explanation / Answer
Total PU Sales 3300000 220.00 DM 915000 61.00 DL 240000 16.00 MR(V) 60000 4.00 Dep 330000 22.00 Utilities(V) 210000 14.00 Plant Salaries 190000 12.67 Gross Profit 1355000 90.33 Selling Expense Packaging 75000 5.00 Shipping 105000 7.00 Sales Salary 235000 15.67 G&A Expense Adversting 125000 8.33 Salaries 230000 15.33 Ent Expense 80000 5.33 Income 505000 33.67 1&2 Flexible Budget Flexible Budget For Variable Amount Per Unit Total Fixed Cost Units Sales of 14000 Units Sales of 16000 Sales 220.00 3080000 3520000 Variable Costs: Direct Material 61.00 854000 976000 Direct Labor 16.00 224000 256000 Machining Repairs 4.00 56000 64000 Utilities(V) 14.00 196000 224000 Total Variable Cost 95.00 13,30,000 15,20,000 Contribution Margin 125.00 17,50,000 20,00,000 Fixed Costs: Depreciation 330000 330000 330000 Plant Salaries 190000 190000 190000 Packaging 75000 75000 75000 Shipping 105000 105000 105000 Sales Salary 235000 235000 235000 Adversting 125000 125000 125000 Salaries 230000 230000 230000 Ent Expense 80000 80000 80000 Total Fixed Costs 1370000 1370000 1370000 Net Operating Income 3,80,000 6,30,000 3 PHOENIX COMPANY Sales Units 15000 18000 Contribution Margin PU 125.00 125.00 Contribution Margin 1875000 2250000 Fixed Costs 1370000 1370000 Expected Increase in OI 505000 880000 375000 4 PHOENIX COMPANY Sales Units 15000 12000 Contribution Margin PU 125.00 125.00 Contribution Margin 1875000 1500000 Fixed Costs 1370000 1370000 Expected Increase in OI 505000 130000 -375000