Chapter 23 | Problem 23-2A: Preparing and analyzing a flexible budget performance report.

Problem 23-1A Preparing and analyzing a flexible budget @p1Q A1 Phoenix Company's 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. Fixed Budget Report For Year Ended December 31, 2019 Sales $3,000,000 Cost of goods sold Direct materials $975,000 Direct labor 225,000 60,000 300,000 195,000 200,000 1,955,000 1,045,000 Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($45,000 is variable) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries 75,000 105,000 250,000 430,000 125,000 241,000 90,000 456,000 Entertainment expense Income from operations $ 159,000 Problem 23-2A Preparing and analyzing a flexible budget performance report @ P1 P2 QA1 Refer to the information in Problem 23-1A. Phoenix Company's actual income statement follows. Statement of Income from Operations For Year Ended December 31, 2019 $3,648,000 Sales (18,000 units) Cost of goods sold Direct materials $1,185,000 Direct labor 278,000 63,000 300,000 Machinery repairs (variable cost) Depreciation-Plant equipment Utilities (fixed cost is $147,500) Plant management salaries 200,500 210,000 2,236,500 Gross profit 1,411,500 87,500 118,500 Selling expenses Packaging Shipping Sales salary (annual) General and administrative expenses Advertising expense Salaries 268,000 474,000 132,000 241,000 Entertainment expense 93,500 466,500 Income from operations $ 471,000 Required 1. Prepare a flexible budget performance report for 2019. Check (1) Variances: Fixed costs, $36,000 U; Income, $9,000 F 2. Compute both the (a) sales variance and (b) direct materials cost variance