Problem 23-2A Preparing and analyzing a flexible budget performance report LO P1, P2, A1 Phoenix Company's 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 18,000 units. $3,600,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials $1,260,000 Direct labor 270,000 Machinery repairs (variable cost) 36,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities ($18,000 is variable) 168,000 Plant management salaries 215,000 Gross profit Selling expenses Packaging 54,000 Shipping 90,000 Sales salary (fixed annual amount) 260,000 General and administrative expenses Advertising expense 126,000 Salaries 241,000 Entertainment expense 110,000 Income from operations 2,249,000 1,351,000 404,000 477,000 470,000 $ Phoenix Company's actual income statement for 2019 follows. $4,263,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2019 Sales (21,000 units) Cost of goods sold Direct materials $1,487,000 Direct labor 323,000 Machinery repairs (variable cost) 33,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities (fixed cost is $147,500) 168,000 Plant management salaries 225,000 Gross profit Selling expenses Packaging 60,500 Shipping 97,500 Sales salary (annual) 278,000 General and administrative expenses Advertising expense 135,000 Salaries 241,000 Entertainment expense 113,500 Income from operations 2,536,000 1,727,000 436,000 489,500 801,500 $ Required: 1. Prepare a flexible budget performance report for 2019. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) For Year Ended December 31, 2019 Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs 0 0 Fixed costs