ces 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 Direct labor $915,000 225,000 45,000 Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($45,000 is variable) 330,000 180,000 Plant management salaries 190,000 1,885,000 Gross profit 1,115,000 Selling expenses Packaging Shipping 75,000 90,000 Sales salary (fixed annual amount) 235,000 400,000 General and administrative expenses Advertising expense Salaries 150,000 Entertainment expense 230,000 90,000 470,000 Income from operations $ 245,000 Required: 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. Variable costs Fixed costs Variable Amount Total Fixed per Unit Cost B 2 3 of 3 # ts 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 this volume is within the relevant range of existing capacity. How much would operating income increase over the budgeted amount of $245,000 if this level is reached without increasing capacity? eBook References PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2010 18,000 Sales (in units) 15,000 Contribution margin (per unit) Contribution margin Fixed costs Operating income 4. 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 minus sign.) ces PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 15,000 Sales (in units) Contribution margin (per unit) Contribution margin Fixed costs Operating income (loss) 12,000