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. Sales Cost of goods sold Direct materials Direct labor PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Machinery repairs (variable cost) Depreciation Plant equipment (straight-line) Utilities ($30, 000 is variable) Plant management salaries Gross profit $3,150,000 $ 915,000 225,000 45,000 300,000 195,000 200,000 1,880,000 1,270,000 Selling expenses 75,000 Shipping 90,000 Sales salary (fixed annual amount) 236,000 400,000 General and administrative expenses Advertising expense 150,000 Salaries 241,000 Entertainment expense Income from operations 75,000 466,000 $ 404, 000 Packaging 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 $404,000 if this level is reached without increasing capacity? Sales (in units) Contribution margin (per unit) PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 15,000 18,000
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. Sales Cost of goods sold Direct materials Direct labor PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2019 Machinery repairs (variable cost) Depreciation Plant equipment (straight-line) Utilities ($30, 000 is variable) Plant management salaries Gross profit $3,150,000 $ 915,000 225,000 45,000 300,000 195,000 200,000 1,880,000 1,270,000 Selling expenses 75,000 Shipping 90,000 Sales salary (fixed annual amount) 236,000 400,000 General and administrative expenses Advertising expense 150,000 Salaries 241,000 Entertainment expense Income from operations 75,000 466,000 $ 404, 000 Packaging 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 $404,000 if this level is reached without increasing capacity? Sales (in units) Contribution margin (per unit) PHOENIX COMPANY Forecasted Contribution Margin Income Statement For Year Ended December 31, 2019 15,000 18,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![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.
Sales
Cost of goods sold
Direct materials
Direct labor
PHOENIX COMPANY
Fixed Budget Report
For Year Ended December 31, 2019
Machinery repairs (variable cost)
Depreciation Plant equipment (straight-line)
Utilities ($30, 000 is variable)
Plant management salaries
Gross profit
$3,150,000
$ 915,000
225,000
45,000
300,000
195,000
200,000
1,880,000
1,270,000
Selling expenses
75,000
Shipping
90,000
Sales salary (fixed annual amount)
236,000
400,000
General and administrative expenses
Advertising expense
150,000
Salaries
241,000
Entertainment expense
Income from operations
75,000
466,000
$
404, 000
Packaging
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 $404,000 if this level is reached without increasing capacity?
Sales (in units)
Contribution margin (per unit)
PHOENIX COMPANY
Forecasted Contribution Margin Income Statement
For Year Ended December 31, 2019
15,000
18,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F49f560f1-bb9f-4d38-8463-df126d82f12d%2Fb9bebd1c-746c-4c44-90c9-2753aa56f8fb%2Fo504exq_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
Sales
Cost of goods sold
Direct materials
Direct labor
PHOENIX COMPANY
Fixed Budget Report
For Year Ended December 31, 2019
Machinery repairs (variable cost)
Depreciation Plant equipment (straight-line)
Utilities ($30, 000 is variable)
Plant management salaries
Gross profit
$3,150,000
$ 915,000
225,000
45,000
300,000
195,000
200,000
1,880,000
1,270,000
Selling expenses
75,000
Shipping
90,000
Sales salary (fixed annual amount)
236,000
400,000
General and administrative expenses
Advertising expense
150,000
Salaries
241,000
Entertainment expense
Income from operations
75,000
466,000
$
404, 000
Packaging
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 $404,000 if this level is reached without increasing capacity?
Sales (in units)
Contribution margin (per unit)
PHOENIX COMPANY
Forecasted Contribution Margin Income Statement
For Year Ended December 31, 2019
15,000
18,000
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