Question

Tempo Company's fixed budget (based on sales of 18,000 units) for the first quarter reveals the following. Fixed Budget $3,798,000 $ 432,000 756.000 468,000 232,000 1,888,000 1,910,000 Sales (18,000 units $211 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 Income from operations 144,000 270,000 100.000 514,000 282,000 252,000 222,000 232,000 988.000 408.000 $ (1) Compute the total variable cost per unit. (2) Compute the total fixed costs. (3) Compute the income from operations for sales volume of 16,000 units. (4) Compute the income from operations for sales volume of 20,000 units. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4

Answer 1

(1)	Total variable Cost
	Direct material	$432,000
	Direct Labor	$756,000
	Production supplies	$468,000
	Sales commision	$144,000
	Packaging	$270,000
		$2,070,000
	No. of units	18,000
	Variable cost per unit	$115	(2,070,000/18,000)
(2)	Total fixed Cost
	Plant manager salary	$232,000
	Advertising	$100,000
	Admin salary	$282,000
	Depreciation	$252,000
	Insurance	$222,000
	Office Rent	$232,000
		$1,320,000
(3)	Sales	$3,376,000	(16,000*211)
	Variable cost	$1,840,000	(16,000*115)
	Fixed Cost	$1,320,000
	Income from operations	$216,000
(4)	Sales	$4,220,000	(20,000*211)
	Variable cost	$2,300,000	(20,000*115)
	Fixed Cost	$1,320,000
	Income from operations	$600,000

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