Question

Tempo Company's fixed budget (based on sales of 12,000 units) for the first quarter reveals the following. Fixed Budget $2,592,000 Sales (12,000 units $216 per unit) Cost of goods sold Direct materials Direct labor Production supplies Plant manager salary Gross profit Selling expenses Sales commissions Packaging Advertising Administrative expenses Administrative salaries Depreciation-office equip Insurance Office rent $300,000 504,000 324,000 100,000 1,228,000 1,364,000 84,000 180,000 100,000 364,000 150,000 120,000 90,000 100,000 460,000 $ 540,000 Income from operations (1) Compute the total variable cost per unit. (2) Compute the total fixed costs (3) Compute the income from operations for sales volume of 10,000 units. (4) Compute the income from operations for sales volume of 14,000 units Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 <Prev 8 of 10 Next Q Search or enter address & $ 7 6 2 U Y T W J K G H F D S O LO

Answer 1

Answer is given below

1) Total Variable Cost per unit Total Variable cost Total units produced $1,392,000 12,000 $116.00 Per Unit 2) Total Fixed Cost $660,000 3) Income from Operations at Sales of 10,000 units $340,000 4) Income from Operations at Sales of 14,000 units $740,000 Working Note Total variable Total Fixed cost Cost Direct material Direct Labor Production supplies Plant manager salary $300,000 $504,000 $324,000 $100,000 Sales Commission Packaging Advertising $84,000 $180,000 $100,000 Administrative salaries Depreciation Office equipment Insurance Office Rent $150,000 $120,000 $90,000 $100,000 Total Cost $1,392,000 $660,000 Units Sales Variable cost Fixed Cost Net Income 10,000 $2,160,000 $1,160,000 $660,000 $340,000 14,000 $3,024,000 $1,624,000 $660,000 $740,000