Homework Saved Required information Problem 21-1A 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. $3,150,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight line) Utilities ($60,000 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 $ 915,000 240,000 60,000 300,000 195,000 190,000 1,900,000 1,250,000 75,000 105,000 235,000 415,000 125,000 230,000 75,000 430,000 5405,000 Sed Required information Required: 182. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the five budget as variable or fixed PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Flexible Budget Variable Amount Total Fixed Der Unit Cost Flexible Budget for Units Sales Unit Sales of of 14 000 16.000 Vainable costs 000 O Fixed cos o - 5 6 8 7 8 9 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 2017 budgeted amount of $405.000 if this level is reached without increasing capacity? PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (in units) 15,000 18.000 Contribution margin (per unit) Contribution margin Foced costs Operating income Problem 21-1A Part 4 4. An unfavorable change in business is remotely possible; in this case, production and sales volun How much income (or loss) from operations would occur if sales volume falls to this level? (Enter a 12,000 PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (in units) 15,000 Contribution margin (per unit) Contribution margin Fixed costs Operating income (loss)