Problem 8-2A Preparation and analysis of a flexible budget performance report LO P1, P2, A1 Phoenix Company's 2017 master budget Included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $3,000,000 Cost of goods sold Direct materials $975,000 Direct labor 225,000 Machinery repairs (variable cost) 60,000 Depreciation Plant equipment (straight-Line) 300,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 200,000 1,955,000 Gross profit 1,045,000 Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed annual amount) 250,000 430,000 General and administrative expenses Advertising expense 125,000 Salaries 241,000 Entertainment expense 90,000 456,000 Income from operations $ 159,000 Phoenix Company's actual income statement for 2017 follows. $3,648,000 PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2017 Sales (18,000 units) Cost of goods sold Direct materials $1,185,000 Direct labor 278,000 Machinery repairs (variable cost) 63,000 Depreciation-Plant equipment (straight-Line) 300,000 Help Save & E Prven company ) OLLUGI ILULITUS LUI TURUN Ches PHOENIX COMPANY Statement of Income from Operations Sales (18,000 units) For Year Ended December 31, 2017 Cost of goods sold $3,648,000 Direct materials Direct labor $1,185,000 278,000 Machinery repairs (variable cost) 63,000 Depreciation-Plant equipment (straight-line) 300,000 Utilities (fixed cost is $147,580) 200, 500 Plant management salaries 210,000 2,236,500 Gross profit 1,411,500 Selling expenses Packaging 87,500 Shipping 118,500 Sales salary (annual) 268,000 474,000 General and administrative expenses Advertising expense 132,000 Salaries 241,000 Entertainment expense 93,500 466,500 $ 471,000 Income from operations Required: 1. Prepare a flexible budget performance report for 2017 PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 Flexible Budget Actual Results Variances Fav./Untay Variable costs Hlavt PHOENIX COMPANY Flexible Budget Performance Report For Year Ended December 31, 2017 Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Fixed costs Hart Company made 3,000 bookshelves using 22,000 board feet of wood costing $266,200. The company's direct materials standards for one bookshelf are 8 board feet of wood at $12 per board foot. Exercise 8-13 Computation and interpretation of materials variances LO P2 (1) Compute the direct materials price and quantity variances incurred in manufacturing these bookshelves. AQ = Actual Quantity SQ = Standard Quantity AP Actual Price SP - Standard Price AQ Actual Cost 22,000 $ 266,200 AP $ 12.10 SP $12.00 Standard Cont SQ x SP 22,000 X $ 12.00 $ 284,000 22.000 $ 264,000 $ 0 $ 2,200 $ 2,200 0