Phoenix Conpany's 2019 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units.

Required:

1&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.

Problem 21-1A 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. $3,150,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials $915,000 Direct labor 240,000 Machinery repairs (variable cont) 45,000 Depreciation Plant equipment (straight-line) 330,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 210,000 Gross profit Selling expenses Packaging 75,000 Shipping 105,000 Sales salary (fixed annual amount) 235,000 General and administrative expenses Advertising expense 125.000 Salaries 230,000 Entertainment expense 80,000 Income from operations 1,935,000 1,215,000 415,000 435,000 365,000 $ Problem 21.1A Part 49.2 Variable Amount Total Fixed per Unit Cost Units Sales Unit Sales of of 14,000 16,000 Sales Variable costs Direct materials Direct labor Machinery repairs Utilities Packaging Shipping 45,000.00 45,000, 00 0 1 Total variable costs Contribution margin Fixed costs Depreciation-Plant equipment (straight-line) Utilities Plant management salaries ! Sales salary Advertising expense Salaries Entertainment expense Total fixed costs Income from operations 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 budgeted amount of $365,000 if this level is reached without increasing capacity? PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (in units) 15,000 18.000 Contribution margin (per unit) Contribution margin Fixed costs Operating income 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? (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 (los)