Refer to the information in Problem 8-1A. Phoenix Company's actual income statement for 2015 follows.

In Problem 8-1A
Phoenix Company's 2015 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units.

Required
1. Prepare a flexible budget performance report for 2015.
Analysis Component
2. Analyze and interpret both the
(a) Sales variance and
(b) Direct materials cost variance.

Transcribed Image Text:

PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31,2015 Sales (18,000 units) Cost of goods sold $3,648,000 Direct materials Direct labor Machinery repairs (variable cost) $1,185,000 63,000 300,000 200,500 Utilities (fixed cost is $147,500) Plant management salaries 210,000 2,236,500 1411,500 Gross profit Selling expenses 87,500 1 18,500 268,000 Sales salary (annual) General and administrative expenses 474,000 32.000 241,000 93,500 Salaries 466,500 471,000 Income from operations PHOENIX COMPANY Fixed Budget Report For Year Ended December 31,2015 $3,000,000 Cost of goods sold Direct labor Machinery repairs (variable cost) Depreciation-plant equipment (straight-line). 225,000 95,000 200,000 955,000 Plant management salaries 1,045,000 Selling expenses MsfoYViel Shipping 方,00t) 05,000 5000 25,000 ._._._...-.A00 430000 General and administrative expenses Advertising expense Salaries 456,000 $ 159,000