### Required InformationThe following information applies to the questions displayed below.**Phoenix Company’s 2019 Master Budget Report**This report includes the fixed budget for Phoenix Company based on an expected production and sales volume of 15,000 units.---**PHOENIX COMPANY****Fixed Budget Report***For Year Ended December 31, 2019*- **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 - **Total Cost of Goods Sold**: $1,955,000- **Gross Profit**: $1,045,000- **Selling Expenses**: - Packaging: $75,000 - Shipping: $105,000 - Sales salary (fixed annual amount): $250,000 - **Total Selling Expenses**: $430,000- **General and Administrative Expenses**: - Advertising expense: $125,000 - Salaries: $241,000 - Entertainment expense: $90,000 - **Total General and Administrative Expenses**: $456,000- **Income from Operations**: $159,000---An unfavorable change in business is remotely possible; in this case, production and sales volume for the year could fall to 12,000 units. How much income (or loss) from operations would occur if sales volume falls to this level? *(Enter any loss with a minus sign.)* ### Phoenix Company Contribution Margin Income Statement Analysis**Overview:**This document provides a financial insight into the Phoenix Company with a focus on their contribution margin income statement for the year ended December 31, 2019. It also explores potential impacts on income from operational changes.**Financial Details:**1. **Salaries (70% are variable):** $1,955,000 - **Plant management salaries:** $200,0002. **Gross Profit:** $1,045,0003. **Selling Expenses:** - **Packaging:** $75,000 - **Shipping:** $105,000 - **Sales Salary (fixed annual amount):** $250,000 - **Total Selling Expenses:** $430,0004. **General and Administrative Expenses:** - **Advertising Expense:** $125,000 - **Salaries:** $241,000 - **Entertainment Expense:** $90,000 - **Total General and Administrative Expenses:** $456,0005. **Income from Operations:** $159,000**Scenario Analysis:**An unfavorable business change is possible, wherein production and sales could decrease to 12,000 units. The document outlines the potential impact on operational income.**Contribution Margin Income Statement Table:**| **Phoenix Company** ||--------------------------------------------------|| **Forecasted Contribution Margin Income Statement** || **For Year Ended December 31, 2019** || **Sales (in units)** | **15,000** | **12,000** ||-------------------------------|------------|------------|| Contribution margin (per unit)| | || Contribution margin | | || Fixed costs | | || **Operating income (loss)** | | |- The table has placeholders for both scenarios (15,000 units and 12,000 units) to calculate the contribution margin and operating income or loss.**Conclusion:**To determine the financial impact if sales volume decreases to 12,000 units, it is essential to fill in the contribution margin and fixed cost details in the table, which will help in assessing the operating income or loss as per changes in sales volume.

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Description: ### Required InformationThe following information applies to the questions displayed below.**Phoenix Company’s 2019 Master Budget Report**This report includes the fixed budget for Phoenix Company based on an expected production and sales volume of 1

Contribution margin income statement:Under this income statement, both the variable and fixed costs of the business are shown bifurcated. All the variable costs like cost of goods sold, and variable operating expenses are deducted from the sales revenue to arrive at the contribution margin. From the contribution margin, all the fixed costs are deducted to calculate the net income.

Business

Accounting

Required information (The following information applies to the questions displayed below.] 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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales $3,000,000 Cost of goods sold Direct materials $975,000 225,000 60,000 300,000 195,000 200,000 Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($45,000 is variable) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries 1,955,000 1,045,000 75,000 105,000 250,000 430,000 125,000 241,000 90,000 Entertainment expense Income from operations 456,000 $ 159,000

Required information (The following information applies to the questions displayed below.] 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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales $3,000,000 Cost of goods sold Direct materials $975,000 225,000 60,000 300,000 195,000 200,000 Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($45,000 is variable) Plant management salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries 1,955,000 1,045,000 75,000 105,000 250,000 430,000 125,000 241,000 90,000 Entertainment expense Income from operations 456,000 $ 159,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Phoenix Company reports the following fixed budget. It is based on an expected production and sales volume of 15,500 units. PHOENIX COMPANY Fixed Budget For Year Ended December 31 Sales $ 3,100,000 Costs Direct materials 992,000 Direct labor 232,500 Sales staff commissions 62,000 Depreciation—Machinery 295,000 Supervisory salaries 198,000 Shipping 217,000 Sales staff salaries (fixed annual amount) 251,000 Administrative salaries 498,500 Depreciation—Office equipment 199,000 Income $ 155,000 Problem 23-2A (Algo) Preparing a flexible budget performance report LO P1 Phoenix Company reports the following actual results. Actual sales were 18,500 units. Sales (18,500 units) $ 3,746,250 Costs Direct materials $ 1,198,800 Direct labor 284,900 Sales staff commissions 64,750…
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Required information [The following information applies to the questions displayed below] 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. Sales Cost of goods sold Direct materials Direct labor PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Machinery repairs (variable cost) Depreciation Plant equipment (straight-line) Utilities ($30, 000 is variable) Plant management salaries Gross profit $3,150,000 $ 915,000 225,000 45,000 300,000 195,000 200,000 1,880,000 1,270,000 Selling expenses 75,000 Shipping 90,000 Sales salary (fixed annual amount) 236,000 400,000 General and administrative expenses Advertising expense 150,000 Salaries 241,000 Entertainment expense Income from operations 75,000 466,000 $ 404, 000 Packaging 3. The company's business conditions are improving. One possible result is a sales volume of 18,000 units. The company president is confident that…
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