Required Information Problem 8-1A Preparetlon and analysls of a flexlble budget LO P1 The following Information applies to the questions displayed below Phoenlx 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 COMPANY Fixed Budget Report For Year Ended December 31, 2817 Sales $3,888,808 Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) Depreciation Plant equipment (straight-line) Utilities ($68,8 is variable) Plant nanagement salaries $96e,69e 248,689 6e,008 33e,690 218,69 22e , eee 2,820 , 986,808 Gross profit Selling expenses Packaging Shipping Sales salary (fixed annual amount) 9e,808 9e,008 235,890 415,808 General and adninistrative expenses Advertising expense Salaries 125,690 238,689 9e.699 Entertainnent expense 445,808 S 128,e80 Income fron operations Problem 8-1A Part 3 3. The company's business conditions are Improving. One possible result Is a sales volume of 18,000 unlts. The company presldent Is confident that this volume Is within the relevant range of exlsting capacity. How much would operating Income Increase over the 2017 budgeted amount of $120.000 if this level Is reached without Increasing capacity? Forecasted Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (in units) Contribution margin (per unt) Contribution margin Fixed costs Operating income 15,000 18,000