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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.
Fixed Budget Report
For Year Ended December 31, 2017
|Cost of goods sold|
|Machinery repairs (variable cost)||60,000|
|Depreciation—Plant equipment (straight-line)||315,000|
|Utilities ($30,000 is variable)||210,000|
|Plant management salaries||210,000||1,995,000|
|Sales salary (fixed annual amount)||235,000||415,000|
|General and administrative expenses|
|Income from operations||$||295,000|
1&2. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixed budget as variable or fixed.
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