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	$	915,000
Direct labor		240,000
Machinery repairs (variable cost)		45,000
DepreciationPlant equipment (straight-line)		330,000
Utilities ($45,000 is variable)		180,000
Plant management salaries		200,000			1,910,000
Gross profit					1,090,000
Selling expenses
Packaging		75,000
Shipping		105,000
Sales salary (fixed annual amount)		235,000			415,000
General and administrative expenses
Advertising expense		150,000
Salaries		230,000
Entertainment expense		75,000			455,000
Income from operations				$	220,000

Problem 21-1A Part 4

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?

PHOENIX COMPANY
Forecasted Contribution Margin Income Statement
For Year Ended December 31, 2019
Sales (in units)	15,000	12,000
Contribution margin (per unit)
Contribution margin
Fixed costs
Operating income (loss)