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Phoenix Companys 2019 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, 2019
Sales				$	3,600,000
Cost of goods sold
Direct materials	$	960,000
Direct labor		240,000
Machinery repairs (variable cost)		32,000
DepreciationPlant equipment (straight-line)		300,000
Utilities ($16,000 is variable)		176,000
Plant management salaries		215,000			1,923,000
Gross profit					1,677,000
Selling expenses
Packaging		48,000
Shipping		80,000
Sales salary (fixed annual amount)		260,000			388,000
General and administrative expenses
Advertising expense		128,000
Salaries		251,000
Entertainment expense		100,000			479,000
Income from operations				$	810,000

Phoenix Companys actual income statement for 2019 follows

PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019
Sales (19,000 units)				$	4,353,000
Cost of goods sold
Direct materials	$	1,156,000
Direct labor		294,000
Machinery repairs (variable cost)		30,000
DepreciationPlant equipment (straight-line)		300,000
Utilities (fixed cost is $157,000)		175,250
Plant management salaries		226,000			2,181,250
Gross profit					2,171,750
Selling expenses
Packaging		54,250
Shipping		87,000
Sales salary (annual)		277,000			418,250
General and administrative expenses
Advertising expense		135,000
Salaries		251,000
Entertainment expense		104,000			490,000
Income from operations				$	1,263,500

Required: 1. Prepare a flexible budget performance report for 2019. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)

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