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. 
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.
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