PHOENIX COMPANY_Flexible Budget
PHOENIX COMPANY_Flexible Budget
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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.
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| 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 |
