Fundamental Accounting Principles: P23-4A Refer to information in Problem 23-3A. Phoenix Company's
Fundamental Accounting Principles P23-4A Preparation and analysis of a flexible budget performance report Refer to information in Problem 23-3A. Phoenix Company’s actual income statement for 2013 follows. PHOENIX COMPANY Statement of Income from Operations For Year Ended December 31, 2013 Sales (18,000 units) 3,648,000 Cost of goods sold Direct materials 1,185,000 Direct labor 278,000 Machinery repairs (variable cost) 63,000 Depreciation — Plant equipment 300,000 Utilities (fixed cost is $147,500) 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 Income from operations $471,000Required 1. Prepare a flexible budget performance report for 2013. Analysis Component Analyze and interpret both the (a) sales variance and (b) direct materials variance.