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

Phoenix Companys 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				$	3,825,000
Cost of goods sold
Direct materials	$	975,000
Direct labor		240,000
Machinery repairs (variable cost)		75,000
Depreciationplant equipment		300,000
Utilities ($45,000 is variable)		205,000
Plant management salaries		230,000			2,025,000
Gross profit					1,800,000
Selling expenses
Packaging		85,000
Shipping		115,000
Sales salary (fixed annual amount)		260,000			460,000
General and administrative expenses
Advertising expense		132,000
Salaries		261,000
Entertainment expense		100,000			493,000
Income from operations				$	847,000

Phoenix Companys actual income statement for 2013 follows.

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

Sales (20,000 units)				$	4,563,000
Cost of goods sold
Direct materials	$	1,163,059
Direct labor		291,353
Machinery repairs (variable cost)		80,235
Depreciationplant equipment		300,000
Utilities (fixed cost is $157,500)		209,441
Plant management salaries		240,000			2,284,088
Gross profit					2,278,912
Selling expenses
Packaging		98,000
Shipping		127,794
Sales salary (annual)		279,000			504,794
General and administrative expenses
Advertising expense		140,000
Salaries		261,000
Entertainment expense		103,500			504,500
Income from operations				$	1,269,618

Required:
1.	Prepare a flexible budget performance report for 2013. (Do not round intermediate calculations.)

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