! Required information 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. Sales PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities ($45,000 is variable) Plant management salaries Gross profit Selling expenses $3,000,000 $915,000 210,000 60,000 300,000 195,000 210,000 1,890,000 1,110,000 Packaging 90,000 Shipping 90,000 Sales salary (fixed annual amount) 235,000 415,000 General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations 150,000 241,000 80,000 471,000 $ 224,000 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 $224,000 if this level is reached without increasing capacity? Sales (in units) Contribution margin (per unit) Contribution margin PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 15,000 18,000 Fixed costs Operating income