11. value: 4.00 points Phoenix Company\'s 2015 master budget included the follow

Question

11. value: 4.00 points 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 96,000 250,000 410,000 General and administrative expenses Advertising expense Salaries Entertainment expense 134,000 251,000 90,000 475,000 Income from operations $ 1,075,000

Explanation / Answer

Flexible Budget Performance Report Flexible Actual Variances Fav/unfav budget results Sales 4,000,000 4,828,000 828,000 Fav/unfav variable costs Direct materials 960,000 1,156,000 196,000 U direct labor 320,000 388,000 68,000 U Machinery repairs 48,000 48,000 0 N Utilities 32,000 37250 5,250 U Packaging 64,000 73,500 9,500 U Shipping 96,000 106,500 10,500 U total variable costs 1,520,000 1,809,250 289,250 U contribution margin 2,480,000 3,018,750 538,750 F fixed costs Depreciation-plant Equipment 315,000 315,000 0 N utilities 150000 147,000 3,000 F plant management salaries 215,000 226,000 11,000 U Sales salary 250,000 267,000 17,000 U Advertising expense 134,000 143,000 9,000 U Salaries 251,000 251,000 0 N Entertainment expense 90,000 93,500 3,500 U total fixed costs 1,405,000 1,442,500 37,500 U income from operations 1,075,000 1,576,250 501,250 F

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