Question

Chap 21 Homework Required information The following information applies to the questions displayed below] Part 1 of 3 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 points $3,300,000 Skipped $ 930,000 225,000 60.000 330,000 180,000 210.000 Book PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation Plant equipment straight-line) Utilities ($30,000 is variable) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations Part 1.035,000 1,365,000 References 75,000 105,000 235,000 415,000 150,000 241,000 85,000 476,000 474,000 $ An unfavorable change in business is remotely possible in this case, production and sales volume for the year could fall to 12,000

Answer 1

4.

Forecasted contribution margin income statement is as follows:

Phoenix company
Forecasted contribution margin income statement
For the year ended December 31, 2018
Sales (units) (a)	15000	12000
Contribution margin per unit (b)	125	125
Contribution margin (a*b)	1875000	1500000
less: Fixed costs	-1401000	-1401000
Operating income (loss)	474000	99000

Working note:

Sales	3300000
Less:
Direct materials	-930000
Direct labor	-225000
Machinery repairs	-60000
Utilities	-30000
Packaging	-75000
Shipping	-105000
Contribution margin	1875000
Units	15000
Contribution margin per unit	125

Fixed cost:

Depreciation	330000
Utilities (180000 - 30000)	150000
Plant mgt salaries	210000
Sales salary	235000
Advertising	150000
Salaries	241000
Entertainment expense	85000
Fixed cost	1401000