Required Information Problem 23-1A 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 Thudget Report Por Year Ended December 31, 2019 Sales Cont of goods sold Direct materials $945,000 Direct labor 240,000 Machinery repairs (variable cost) 60,000 Depreciation-plant equipment (traight-line) 315,000 Utilities ($45,000 is variable) 210,000 Plant management salaries 210,000 Crona profit Selling expenses Packaging 90,000 Shipping 105,000 Sales walary (fixed annual amount) 235,000 General and administrative expenses 150,000 Advertising expense Balarin 230,000 Intertainment expense 90,000 Tacone from operatione 1,980,000 1,170,000 430.000 470,000 270,000 Problem 23-1A Part 1&2 Required: 182. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classily all items listed in the fored budget as variable or fixed. PHOENIX COMPANY 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. PHOENIX COMPANY Flexible Budgets For Year Ended December 31, 2019 Flexible Budget Variable Amount Total Fixed Cost Flexible Budget for: Units Sales Unit Sales of of 14,000 16,000 per Unit Variable costs 0.00 0 Fixed costs $ OS os $3,150,000 Sales 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 Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations $945,000 240.000 60,000 315,000 210,000 210.000 1.980,000 1,170,000 90.000 105.000 235,000 430,000 150,000 230,000 90,000 470,000 $ 270,000 Problem 23-1A 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 $270,000 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 out Operating income 1,170,000 expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations 90,000 105,000 235,000 430,000 150,000 230,000 90,000 470,000 $ 270,000 Problem 23-1A 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 Fondos Operating income (1968)