Required information Problem 21-1A Preparing and analyzing a flexible budget LO P1, A1 (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. $3,150,000 PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Sales Cost of goods sold Direct materials $930,000 Direct labor 225,000 Machinery repairs (variable cost) 45,000 Depreciation-Plant equipment (straight-line) 315,000 Utilities ($60,000 is variable) 210,000 Plant management salaries 210,000 Gross profit Selling expenses Packaging 90,000 Shipping 90,000 Sales salary (fixed annual amount) 235,000 General and administrative expenses Advertising expense 150,000 Salaries 241,000 Entertainment expense 90,000 Income from operations 1,935,000 1,215,000 415,000 481,000 319,000 $ Problem 21-1A Part 3 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 $319,000 if this level is reached without increasing capacity? wuuyeleu diluuiL UI 519,ll lis leveris Tedlieu wilIIUUL lilledsiny CdAdlily! Answer is complete but not entirely correct. PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (in units) 15,000 18,000 Contribution margin (per $ 116.00 $ 116.00 unit) Contribution margin 1,740,000 2,088,000 Fixed costs 1,421,000 X 1,421,000 Operating income $ 319,000 $ 667,000 X $ 348,000 Operating income increase