Phoenix Companys 2017 master budget included the following f

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. 2 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales cost of goods sold $3,150,000 Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($60,000 is variable) Plant management salaries $945,000 225,000 60,000 330,000 195,000 220,000 1,975,000 1,175,000 Gross profit Selling expenses 90,000 90,000 235,000 Packaging Shipping Sales salary (fixed annual amount) 415,000 General and administrative expenses 125,000 241,000 Advertising expense Salaries Entertainment expense 75,000 441,000 $319,000 Income from operations

Solution

Answer 1 & 2. PHOENIX COMPANY Fixed Budget Report For Year Ended Dec 31, 2017 Flexible Budget Flexible Budget For Variable Amt. Per Unit Total Fixed Cost Unit Sales of 14,000 Unit Sales of 16,000 Sales                210.00    2,940,000.00    3,360,000.00 Variable Cost: Direct Materials                  63.00        882,000.00    1,008,000.00 Direct Labor                  15.00        210,000.00        240,000.00 Machinery Repairs                     4.00          56,000.00          64,000.00 Utilities                     4.00          56,000.00          64,000.00 Packaging                     6.00          84,000.00          96,000.00 Shipping                     6.00          84,000.00          96,000.00 Total Variable Cost                  98.00    1,372,000.00    1,568,000.00 Contribution                112.00    1,568,000.00    1,792,000.00 Fixed Cost Depreciation - Plant Equipment        330,000.00        330,000.00        330,000.00 Utilities        135,000.00        135,000.00        135,000.00 Plant Management Salaries        220,000.00        220,000.00        220,000.00 Sales Salary        235,000.00        235,000.00        235,000.00 Advertising Expense        125,000.00        125,000.00        125,000.00 Salaries        241,000.00        241,000.00        241,000.00 Entertainment Expense          75,000.00          75,000.00          75,000.00 Total Fixed Cost    1,361,000.00    1,361,000.00    1,361,000.00 Income From Operations        207,000.00        431,000.00 Answer 3. PHOENIX COMPANY Forecasted Contribution Margin Income Statement For the Year Ended Dec 31, 2017 Units Sold 15,000 Units Sold 18,000 Diference Sales In Units          15,000.00          18,000.00 Contribution Margin (Per Unit)                112.00                112.00 Contribution Margin    1,680,000.00    2,016,000.00 Fixed Cost    1,361,000.00    1,361,000.00 Operating Income        319,000.00        655,000.00        336,000.00 (Expected Inc. (Dec.) in Operating Income) Answer 4. PHOENIX COMPANY Forecasted Contribution Margin Income Statement For the Year Ended Dec 31, 2017 Units Sold 15,000 Units Sold 12,000 Diference Sales In Units          15,000.00          12,000.00 Contribution Margin (Per Unit)                112.00                112.00 Contribution Margin    1,680,000.00    1,344,000.00 Fixed Cost    1,361,000.00    1,361,000.00 Operating Income (Loss)        319,000.00        (17,000.00)     (336,000.00) (Expected Inc. (Dec.) in Operating Income)