Phoenix Company\'s 2015 master budget included the following fixed budget report
ID: 2577933 • Letter: P
Question
Phoenix Company's 2015 master budget included the following fixed budget report it is based on an expected production and sales volume of 16,000 units PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2015 Sales Cost of goods sold $ 4,000,000 Direct materials Direct labor Machinery repairs (variable cost) Depreciation- plant equipment (straight-line) Utilities ($32,000 is variable) Plant management salaries $960,000 320,000 48,000 315,000 182,000 215,0002,040,000 Gross profit Selling expenses 1,960,000 Packaging Shipping Sales salary (fixed annual amount) 64,000 96,000 250,000410 000 General and administrative expenses Advertising expense Salaries Entertainment expense 134,000 251,000 90,000 475,000 Income from operations S 1,075,000Explanation / Answer
PHOENIX COMPANY Flexible Budget Performance Report For the Year Ended December 31, 2015 Flexible Budget Actual Results Variances Fav. / Unfav. Sales 4750000 4828000 78000 Fav. Variable costs Direct materials 1140000 1156000 16000 Unfav. Direct labor 380000 388000 8000 Unfav. Machinery repairs 57000 48000 9000 Fav. Utilities 32000 37250 5250 Unfav. Packaging 76000 73500 2500 Fav. Shipping 114000 106500 7500 Fav. Total variable costs 1799000 1809250 10250 Unfav. Contribution margin 2951000 3018750 67750 Fav. Fixed costs Depreciation-plant equipment (straight-line) 315000 315000 0 None Utilities 150000 147000 3000 Fav. Plant management salaries 215000 226000 11000 Unfav. Sales salary 250000 267000 17000 Unfav. Advertising expense 134000 143000 9000 Unfav. Salaries 251000 251000 0 None Entertainment expense 90000 93500 3500 Unfav. Total fixed costs 1405000 1442500 37500 Unfav. Income from operations 1546000 1576250 30250 Fav.