Problem 21-1A Preparing and analyzing a flexible budget Opi Phoenix Company reports the following fixed budget. It is based on an expected production and sales volume of 15,000 units. Fixed Budget For Year Ended December 31 Sales $3,000,000 Costs Direct materials Direct labor Sales staff commissions Depreciation-Machinery Supervisory salaries Shipping Sales staff salaries (fixed annual amount) Administrative salaries Depreciation Office equipment Income 975,000 225,000 60,000 300,000 200,000 225,000 250,000 411,000 195,000 $ 159,000 Required 1. Classify all items listed in the fixed budget as variable or fixed. For variable costs, determine their amounts per unit. For fixed costs, determine their amounts for the year. 2. Prepare flexible budgets (see Exhibit 21.3) at sales volumes of 14,000 and 16,000 units. 3. The company's business conditions are improving. One possible result is a sales volume of 18,000 units. Prepare a simple budgeted income statement (as in Exhibit 21.1) if 18,000 units are sold. Check (2) Budgeted income at 16,000 units, $260,000