Problem 21-1A Preparation and analysis of a flexible budget LO P1 [The following information applies to the questions displayed below.] expected production and sales volume of 15,000 units. $ 3,000,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2015 Sales Cost of goods sold Direct materials $ 975,000 Direct labor 225,000 Machinery repairs (variable cost) 60,000 Depreciation-plant equipment (straight-line) 300,000 Utilities ($45,000 is variable) 195,000 Plant management salaries 200,000 1,955,000 1,045,000 Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) 75,000 105,000 250,000 430,000 General and administrative expenses Advertising expense Salaries Entertainment expense 125,000 241,000 90,000 456,000 Income from operations $ 159,000 References Section Break Problem 21-1A Preparation and analysis of a flexible budget LO P1 8. value: 3.16 points Problem 21-1A Part 4 4. An unfavorable change in business is remotely possible; in this case, production and sales volume for 2015 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, 2015 Sales (in units) 15,000 12,000 Contribution margin (per unit) $ 101.00 $ 101.00 Contribution margin $ 1,515,000 $ 1,212,000 Fixed costs (1,356,000) (1,356,000) Operating income (loss) $ 159,000