Question

tempo company’s fixed budget(based on sales of 7,000unjts)

viable V b. ScrewS TUIS V c. Direct labor f. Gas used for healing 1-2 exible budgets Tempo Company's fixed budget (based on sales of 7.000 units) for the first quarter of calen reveals the following. Prepare flexible budgets following the format of Exhibit 21.3 that show vara for the first quarter of calendar year 2017 of Exhibit 21.3 that show variable costs per unit, fixed costs, and three different flexible budgets for sales volumes of 6,000, 7.000, and 8.000 units Fixed Budget $2,800.000 $280,000 490,000 175,000 65,000 1.010,000 1,790,000 Sales (7,000 units).. 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 Income from operations ...... 140,000 154.000 125,000 419.000 85,000 35,000 20,000 36.000 176,000 $1,195,000 Doo

Answer 1

			Flexible Budget
			variable	total	6,000	7,000	8,000
			amount	fixed cost	units	units	units
			per unit
Sales			400		2400000	2800000	3200000
Variable costs:
Direct materials			40		240000	280000	320000
direct labor			70		420000	490000	560000
production supplies			25		150000	175000	200000
Sales commissions			20		120000	140000	160000
packaging			22		132000	154000	176000
total variable costs			177		1062000	1239000	1416000
contribution margin			223		1338000	1561000	1784000
Fixed costs :
plant manager salary				65,000	65,000	65,000	65,000
Advertising				125,000	125,000	125,000	125,000
Administrative salaries				85,000	85,000	85,000	85,000
Depreciation -office Equip				35,000	35,000	35,000	35,000
insurance				20,000	20,000	20,000	20,000
office rent				36,000	36,000	36,000	36,000
total fixed costs				366,000	366,000	366,000	366,000
income from operations					972,000	1,195,000	1,418,000