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. PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 Sales $3,150,000 Cost of goods sold Direct materials $930,000 Direct labor 225,000 Machinery repairs (variable 45,000 cost) Depreciation-Plant equipment (straight-line) 315,000 Utilities ($60,000 is 195,000 variable) Plant management salaries 210,000 1,920,000 Gross profit 1,230,000 Selling expenses Packaging 75,000 Shipping 90,000 Sales salary (fixed annual 235,000 400,000 amount) General and administrative expenses Advertising expense 125,000 Salaries 241,000 Entertainment expense 90,000 456,000 Income from operations $ 374,000 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 $374,000 if this level is reached without increasing capacity? PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (in units) 1 15,000 18,000 Contribution margin (per unit) Contribution margin Fixed costs Operating income