Required information 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. $3,150,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales Cost of goods sold Direct materials $930,000 Direct labor 225,000 Machinery repairs (variable cost) 45,000 Depreciation--Plant equipment (straight-line) 330,000 Utilities ($45,000 is variable) 180,000 Plant management salaries 190,000 Gross profit Selling expenses Packaging 90,000 Shipping 105,000 Sales salary (fixed annual amount) 235,000 General and administrative expenses Advertising expense 150,000 Salaries 241,000 Entertainment expense 75,000 Income from operations 1,900,000 1,250,000 430,000 466,000 354,000 $ 90,000 105,000 235,000 430,000 Selling expenses Packaging Shipping Sales salary (fixed annual amount) General and administrative expenses Advertising expense Salaries Entertainment expense Income from operations 150,000 241,000 75,000 466,000 354,000 $ 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 2017 budgeted amount of $354,000 if this level is reached without increasing capacity? PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (in units) 15,000 18,000 Contribution margin (per unit) $ 114.00 S 114.00 Contribution margin $ 1,710,000 $ 2,052,000 Fixed costs 1,356,000 1,356,000 Operating income $ 354,000 Operating income increase