PHOENIX COMPANY_Flexible budget

Problem 23-4A Preparation and analysis of a flexible budget performance report LO P1, P2, A1

Phoenix Company’s 2013 master budget included the following fixed budget report. It is based on an expected production and sales volume of 17,000 units.

PHOENIX COMPANY
Fixed Budget Report
For Year Ended December 31, 2013

Sales			$	4,250,000
Cost of goods sold
Direct materials	$	975,000
Direct labor		240,000
Machinery repairs (variable cost)		60,000
Depreciation—plant equipment		315,000
Utilities ($55,000 is variable)		215,000
Plant management salaries		215,000		2,020,000

Gross profit				2,230,000
Selling expenses
Packaging		80,000
Shipping		110,000
Sales salary (fixed annual amount)		250,000		440,000

General and administrative expenses
Advertising expense		126,000
Salaries		251,000
Entertainment expense		100,000		477,000

Income from operations			$	1,313,000

Phoenix Company’s actual income statement for 2013 follows.

PHOENIX COMPANY
Statement of Income from Operations
For Year Ended December 31, 2013

Sales (20,000 units)			$	5,063,000
Cost of goods sold
Direct materials	$	1,163,059
Direct labor		291,353
Machinery repairs (variable cost)		61,588
Depreciation—plant equipment		315,000
Utilities (fixed cost is $158,000)		221,706
Plant management salaries		226,000		2,278,706

Gross profit				2,784,294
Selling expenses
Packaging		91,368
Shipping		122,412
Sales salary (annual)		269,000		482,780

General and administrative expenses
Advertising expense		135,000
Salaries		251,000
Entertainment expense		103,500		489,500

Income from operations			$	1,812,014

11 years ago

Report issue

PHOENIX COMPANY_Flexible budget

NOT RATED

Purchase the answer to view it

phoenix_company_flexible_budget.xlsx