Required information [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. $ 3.000.000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 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 $ 975,000 225,000 60,000 300,000 195,000 200,000 1.955,000 1.045,000 75,000 105,000 250,000 430,000 125,000 241,000 90,000 456, 000 159,000 $ 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. Required: 182. 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 Flexible Budget for: Variable Amount Total Fixed Units Sales Unit Sales Cost of 14,000 of 16,000 S 200.00 S 0.00 $2,800,000 $3,200,000 per Unit 65.00 15.00 Sales Variable costs Direct materials Direct labor Machinery repairs Utilities Packaging Shipping 4.00 4.00 910,000 210,000 56,000 42,000 84,000 84,000 1,040,000 240,000 64,000 48,000 96,000 96,000 3.00 6.00 6.00 103.00 1,386,000 1,584,000 Fixed costs S 0 S 0 S 0 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 $159,000 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 costs Operating income