Required informatio [The following information applies to the questions displaye
ID: 2528027 • Letter: R
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Required informatio [The following information applies to the questions displayed below.] Phoenix Company's 2017 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, 2017 $3,000,000 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($45,000 is variable) Plant management salaries $945,000 210,000 60,000 315,000 210,000 200,000 1,940,000 1,060,000 Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) 75,000 90,000 235,000 400,000 General and administrative expenses Advertising expense Salaries Entertainment expense 100,000 241,000 85,000 426,000 $ 234,000 Income from operationsExplanation / Answer
Calculation of per unit cost
Cost for 12000 units
Sales price
3000000/15000= $ 200
200*12000 = $ 2400000
Variable cost
Direct material
945000/15000 = $ 63
63*12000 = $ 756000
Direct Labor
210000/15000 = $ 14
14*12000 = $ 168000
Machinery repair
60000/15000 = $ 4
4*12000 = $ 48000
Utilities ( Variable $ 45000)
45000/15000 = $ 3
3* 12000 = $ 36000
Packaging
75000/ 15000 = $ 5
5* 12000 = $ 60000
Shipping
90000/15000 = $ 6
6 * 12000 = $ 72000
Total Variable cost
$ 95
$ 1140000
Fixed Cost
Depreciation- Plant Equipment( Straight line)
$ 315000
Utilities ( Excluding $ 45000 Variable)
$ 165000
Plant management salaries
$ 200000
Sales Salary
$ 235000
Advertising Expense
$ 100000
Salaries
$ 241000
Entertainment Expense
$ 85000
Total Fixed cost
$ 1341000
Sales
$ 2400000
Cost of goods sold
Direct material
$ 756000
Direct Labor
$ 168000
Machinery repair
$ 48000
Depreciation- Plant Equipment( Straight line)
$ 315000
Utilities ( $ 36000 + $ 165000)
$ 201000
Plant management salaries
$ 200000
$ 1688000
Gross profit
$ 712000
Selling Expense
Packaging
$ 60000
Shipping
$ 72000
Sales Salary
$ 235000
367000
General & Administrative Expense
Advertising Expense
$ 100000
Salaries
$ 241000
Entertainment Expense
$ 85000
426000
Income from operation ( Loss)
(-81000)
= $200- $ 95
= $ 105
= $ 2400000- $ 1140000$
= $ 1260000
Calculation of per unit cost
Cost for 12000 units
Sales price
3000000/15000= $ 200
200*12000 = $ 2400000
Variable cost
Direct material
945000/15000 = $ 63
63*12000 = $ 756000
Direct Labor
210000/15000 = $ 14
14*12000 = $ 168000
Machinery repair
60000/15000 = $ 4
4*12000 = $ 48000
Utilities ( Variable $ 45000)
45000/15000 = $ 3
3* 12000 = $ 36000
Packaging
75000/ 15000 = $ 5
5* 12000 = $ 60000
Shipping
90000/15000 = $ 6
6 * 12000 = $ 72000
Total Variable cost
$ 95
$ 1140000
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