Question

Tempo Company's fixed budget (based on sales of 16,000 units) for the first quarter of calendar year 2017 reveals the following Fixed Budget 53,424,800 $368,000 672,000 416,000 168,00 1.624,000 1,800,000 Sales (16,000 units) Cost of goods sold Direct materials Direct labor Production supplies Plant manager salary Gross profit Selling expenses Sales Comissions Packaging Advertising Administrative expenses Administrative salaries Depreciation-office equip. Insurance Office rent Income from operations 128,000 240,000 100,000 468,000 218,000 188,888 158,000 168,000 1732,000 $ 600,000 Complete the following flexible budgets for sales volumes of 14,000, 16,000, and 18,000 units. (Round cost per unit to 2 decimal places.)

Answer 1

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Solution TEMPO COMPANY Flexible Budgets For Quarter Ended March 31, 2017 -Flexible Budget- -Flexible Budget at- Variable Total Fixed Amount per Cost 14,000 units 16,000 units Unit $214.00 $2,996,000 $3,424,000 18,000 units $3,852,000 Sales Variable costs: Direct materials Direct labor Production supplies Sales commissions Packaging $23.00 $42.00 $26.00 $8.00 $15.00 $322,000 $588,000 $364,000 $112,000 $ 210,000 $368,000 $672,000 $416,000 $128,000 $240,000 $414,000 $756,000 $468,000 $144,000 $270,000 $114.00 $100.00 $1,596,000 $1,400,000 $1,824,000 $1,600,000 $2,052,000 $1,800,000 Total variable costs Contribution Margin Fixed costs: Plant manager salary Advertising Administrative salaries Depreciation-office equip. Insurance Office rent $168,000 $100,000 $218,000 $188,000 $158,000 $168,000 $168,000 $100,000 $218,000 $ 188,000 $ 158,000 $168,000 $168,000 $100,000 $218,000 $188,000 $158,000 $168,000 $168,000 $100,000 $218,000 $188,000 $158,000 $168,000 $1,000,000 Total fixed costs Net Operating income $1,000,000 $400,000 $1,000,000 $600,000 $1,000,000 $800,000

В E Solution 1 2 TEMPO COMPANY Flexible Budgets For Quarter Ended March 31.2017 --Flexible Budget- --Flexible Budget at- Variable Amount per Unit Total Fixed Cost 14,000 units 16,000 units 18,000 units =F8/16000 =C814000 3424000 =C818000 8 9 10 11 12 13 14 15 16 17 18 Sales Variable costs: Direct materials Direct labor Production supplies Sales commissions Packaging =F10/16000 =F11/16000 =F12/16000 =F13/16000 =F14/16000 =C10*14000 =C11 14000 =C12*14000 =C1314000 =C1414000 368000 672000 416000 128000 240000 =C10*18000 =C1118000 =C12* 18000 =C13*18000 =C1418000 -SUM(E10:E14) -SUM(F10:F14) -SUM(G10:G14) =E8-E16 =F8-F16 =G8-G16 19 Plant 20 21 22 23 24 Total variable costs -SUM(C10:C14) Contribution Margin |=C8-C16 Fixed costs: Plant manager salary Advertising Administrative salaries Depreciation-office equip. linsurance Office rent J=F19 =F20 =F21 =F22 =F23 -F24 =D19 | =D20 =D21 =D22 =D22 168000 100000 218000 188000 158000 168000 =D19 1=D20 =D21 1=D22 =D23 =D24 =D24 25 26 27 Total fixed costs Net Operating income |-SUM(D19:D24) I-SUM(E19:E24) I-SUM(F19:F24) I-SUM(G19:G24) =E17-E26 =F17-F26 =G17-326 28