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 Sales Cost of goods sold Direct materials Direct labor $3, 150, 000 $975, 000 225, 000 45, 000 315, 000 210,000 200, 000 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 1,970, 000 1, 180, 000 90, 000 90,000 235, 000 415, 000 125, 000 241, 000 90,000 456, 000 $ Income from operations 309, 000 Problem 21-1A Part 3 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 $309,000 if this level is reached without increasing capacity? PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (in units) 18,000 15,000 Contribution margin (per unit) Contribution margin Fixed costs Operating income