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Phoenix Companys 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				$	3,600,000
Cost of goods sold
Direct materials	$	880,000
Direct labor		160,000
Machinery repairs (variable cost)		48,000
Depreciationplant equipment (straight-line)		315,000
Utilities ($32,000 is variable)		192,000
Plant management salaries		230,000			1,825,000
Gross profit					1,775,000
Selling expenses
Packaging		64,000
Shipping		96,000
Sales salary (fixed annual amount)		260,000			420,000
General and administrative expenses
Advertising expense		126,000
Salaries		251,000
Entertainment expense		110,000			487,000
Income from operations				$	868,000

Phoenix Companys actual income statement for 2015 follows.

PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2015

Sales (19,000 units)				$	4,323,000
Cost of goods sold
Direct materials	$	1,062,000
Direct labor		198,000
Machinery repairs (variable cost)		49,000
Depreciationplant equipment (straight-line)		315,000
Utilities (fixed cost is $158,000)		195,250
Plant management salaries		239,000			2,058,250
Gross profit					2,264,750
Selling expenses
Packaging		74,000
Shipping		106,500
Sales salary (annual)		278,000			458,500
General and administrative expenses
Advertising expense		134,000
Salaries		251,000
Entertainment expense		114,000			499,000
Income from operations				$	1,307,250

Required:
1.	Prepare a flexible budget performance report for 2015.
	Answer is not complete PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2015 Flexible Budget Actual Results Variances Fav. / Unfav. Sales Variable costs Direct materials Direct labor Machinery repairs Utilities Packaging Shipping Total variable costs 0 0 Contribution margin Fixed costs Utilities Depreciationplant equipment (straight-line) Plant management salaries Salaries Entertainment expense Total fixed costs 0 0 Income from operations

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