Required information [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 Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities (545,000 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 Income from operations $ 900,000 225,000 45,000 315,000 195,000 200,000 1.880,000 1,270,000 90,000 105,000 235,000 430,000 150,000 230,000 30.000 460,000 $ 380,000 Required: 182. 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 PHOENIX COMPANY Flexible Budgets For Year Ended December 31, 2019 Flexible Budget Variable Amount Total Fixed per Unit COM $ 210,00 Flexible Budget for Units Sales Unit Sales of of 14,000 16,000 $ 2.940.000 5 3.350,000 Sales Variable costs Direct materials Direct labor Machinery repairs Ubes Packaging Shipping 60.00 15.00 3.00 3.00 6.00 7.00 9400 188.00 116.00 840,000 960,000 210.000 240,000 42 000 48.000 34,000 96,000 98,000 112.000 1.316 000 1.500.000 1.624.000 1.656,000 4214.000 4616,000 Total variable costs Contribution margin Food costs Depreciation-Plant equipment ( re) Plantmanagement Sales Seary Advertisingapore 315.000 150,000 80.000 200.000 550.000 235.000 230.000 1360.000 $ 2.720,000 315.000 315 000 150 000 150 000 30,000 30.000 200.000 200.000 150,000 150.000 235.000 2000 230 000 230 000 1 360.000 160.000 5 2.720.00052.720.000 5 264.000.000 Income from persons 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 $380,000 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) 5 116.00 $ 116.00 Contribution margin $ 174,000 Fixed costs 1,360.000 1,350,000 Operating income $ 380.000 s 728.000 5 348.000(Operating income increase
