1. 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.

2. The company's business conditions are improving. One possible result is a sales volume or 18,000 units. The company president is confident that this volume is within the relevant range of existing capacity. How much would operating income increase over the 2017 budgeted amount of 400,000 if this level is reached without increasing capacity?

3. An unfavorable change in business is remotely possible; in this case, production and sales volume for 2017 could fall to 12,000 units. How much income (or loss) from operations would occur if sales volume falls to this level?

4. Prepare a flexible budget performance report for 2017.

Required information Problem 23-1A Preparation and analysis of a flexible budget LO P1 The following information applies to the questions displayed below 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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 $3,150,000 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (atraight-1ine Utilities ($60,000 is var Lable) Plant management salaries $945,000 240,000 45,000 315,000 IBO, 000 210,000 935,000 1,215,000 Gross profit Selling expenses Packaging Shipping 75.000 90,000 Sales salary (fixed annual amount) 235 000400,poo General and administrative expenses dvertising expense Salaries Entertainnent expense 100.000 230,000 85.000 415,000 $ 400,000 Income from operations Required information Problem 23-1A Preparation and analysis of a flexible budget LO P1 The following information applies to the questions displayed below 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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 $3,150,000 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (atraight-1ine Utilities ($60,000 is var Lable) Plant management salaries $945,000 240,000 45,000 315,000 IBO, 000 210,000 935,000 1,215,000 Gross profit Selling expenses Packaging Shipping 75.000 90,000 Sales salary (fixed annual amount) 235 000400,poo General and administrative expenses dvertising expense Salaries Entertainnent expense 100.000 230,000 85.000 415,000 $ 400,000 Income from operations