Phoenix Companys 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	$	960,000
Direct labor		225,000
Machinery repairs (variable cost)		45,000
DepreciationPlant equipment (straight-line)		330,000
Utilities ($30,000 is variable)		195,000
Plant management salaries		220,000			1,975,000
Gross profit					1,025,000
Selling expenses
Packaging		90,000
Shipping		90,000
Sales salary (fixed annual amount)		235,000			415,000
General and administrative expenses
Advertising expense		125,000
Salaries		241,000
Entertainment expense		85,000			451,000
Income from operations				$	159,000

3. The companys 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 $159,000 if this level is reached without increasing capacity?

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.)