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.

Problem 23-1A Preparing and analyzing a flexible budget LO P1, A1 The following information applies to the questions displayed below) 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. Part 1 of 3 5.25 points $3,150,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials $930,000 Direct labor 225,000 Machinery repairs (variable cost) 45,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 180,000 Gross profit Selling expenses Packaging 90,000 Shipping 90,000 Sales salary (fixed annual amount) 235,000 General and administrative expenses Advertising expense 150,000 Salaries 230,000 Entertainment expense 80,000 Income from operations 1,890,000 1,260,000 415,000 460,000 385,000 $ Requlred: 18.2. 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. * Answer is not complete. PHOENIX COMPANY Flexible Budgets For Year Ended December 31, 2019 Flexible Budget Variable Amount per Total Fixed Cost Unit $ 210.00 Flexible Budget for: Units Unit Sales of Sales of 14,000 16,000 Sales 2,940,000 3,360,000 Variable costs Direct materials Direct labor Machinery repairs Utilities Packaging Shipping 62.00 15.00 3.00 868,000 210,000 42.000 992,000 240,000 43,000 OOOOO 6.00 6.00 84,000 84,000 96.000 96.000 Total variable costs Contribution margin 92.00 118.00 % 1,288,000 1,652,000 X 1,472,000 1,888,000 X Fixed costs DepreciationPlant equipment (straight- line) Utilities Plant management salaries Sales salary Advertising expense 00000000 315,000 150,000 210,000 235,000 150,000 241,000 X 90,000 315,000 150,000 210,000 235,000 150,000 241,000 X 90,000 315,000 150,000 210,000 235,000 150,000 241,000 90,000 Salaries Entertainment expense Total fixed costs $ 1,391,000 1,391,000 $ 270,000 1,391,000 $ 433,000 Income from operations Problem 23-1A 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 budgeted amount of $385,000 if this level is reached without increasing capacity? Answer is complete but not entirely correct. Sales (in units) Contribution margin (per unit) Contribution margin Fixed costs Operating income PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 15,000 18,000 $ 114.00 $ 114.00 $ 1,710,000 $2,052,000 1,326,000 1,326,000 $ 384,000 $ 726,000 $ 342,000 Operating income increase Problem 23-1A 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 E units. How much income (or loss) from operations would occur if sales volume falls to this level? (Enter any loss with minus sign.) 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)