Tohono Company's 2015 master budget included the following fixed budget report. It is based on an expected production and sales volume of 20,000 units PROBLEM SET B TOHONO COMPANY Fixed Budget Report For Year Ended December 31,2015 Problem 21-1B Preparation and analysis of a flexible budget P1 A1 Sales $3,000,000 Cost of goods sold Direct materials Direct labor Machinery repairs (variable cost) . , , , , , $1.200,000 260,000 57,000 250,000 200,000 iation-machinery (straight-line). Utilities (25% is variable cost) 893,000 Gross profit Selling expenses Packaging . Shipping ....80,000 6,000 Sales salary (fixed annual amount)..60,000 356.000 General and administrative expenses 81,000 Salaries ..241,000 Entertainment expense ...90,000 412.000 125,000 Income from operations.. Required Iso determine their amounts per unit or their amounts for the year, as appropriate. 2. Prepare flexible budget (see Exhibit 21.3) for the company at sales volumes of 18.000 and 24.000 units. Check 2) Budgeted 3. The company's business conditions are improving. One possible result is a sales volume of income at 24,000 units, 28,000 units. The company president is confident that this volume is within the relevant range of exist- $372.400 ing capacity. How much would operating income increase over the 2015 budgeted amount of $125,000 if this level is reached without increasing capacity? (4) Potential 2015 could fall to 14,000 units. How much income (or loss) from operations would occur if sales vol operating loss, $1246, 100 ume falls to this level? 4. An unfavorable change in business is remotely possible; in this case, production and sales volume for