! Required information Problem 23-1A Preparation and analysis of a flexible budget LO P1 [The following information applies to the questions displayed below.] Phoenix Company's 2017 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units PHOENIX COMPAN Fixed Budget Report For Year Ended December 31, 2017 Sales $3, 150, 000 Cost of goods sold Direct materials 975, 000 225, 000 60, 000 Direct labor Machinery repairs (variable cost) Depreciation-Plant equipment (straight-line) Utilities $45, 000 is variable) Plant managem ent salaries Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense 315, 000 210, 000 1,995, 000 210, 000 1, 155, 000 75, 000 90, 000 235, 000 400, 000 125, 000 Salaries 230, 000 Entertainment expense 435, 000 80, 000 Income from operations $ 320, 000 Problem 23-1A Part 3 3. The company's business conditions confident that this volume is within the relevant range of existing capacity. How much would operating income increase over the 2017 budgeted amount of $320,000 if this level is reached without increasing capacity? improving. One possible result is a sales volume of 18,000 units. The company president is are PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (in units) 15,000 18,000 Contribution margin (per unit) Contribution margin Fixed costs Operating income