Question

Tempo Company's fixed budget (based on sales of 12,000 units) for the first quarter reveals the following. Fixed Budget $ 2,544,000 $300,000 528,000 312,000 100,000 1,240,000 1,304,000 Sales (12,000 units X $212 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 96,000 180,000 100,000 376,000 150,000 120,000 90,000 100,000 460,000 468,000 $ (1) Compute the total variable cost per unit. (2) Compute the total fixed costs. (3) Compute the income from operations for sales volume of 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 Compute the total variable cost per unit. Variable cost per unit

Answer 1

Tempo Company Flexible Budget For the Quarter ending March 31 Flexible Budget Flexible Budget at Variable per unit Total Fixed Cost 10000 units 12000 units 14000 units 212 2120000 2544000 2968000 250000 Sales Variable cost: Direct Materials Direct Labour Production Supplies Sales Commissions Packaging 440000 260000 80000 150000 300000 528000 312000 96000 180000 350000 616000 364000 112000 210000 118 94 1180000 940000 1416000 1128000 1652000 1316000 Total Variable costs Contribution Margin Fixed Costs: Plant Manager Salary Advertising Administrative Salaries Depreciation - Off.Equip. Insurance Office Rent 100000 100000 150000 120000 90000 100000 100000 100000 150000 120000 90000 100000 100000 100000 150000 120000 90000 100000 100000 100000 150000 120000 90000 100000 660000 Total Fixed Costs Income From Operations 660000 280000 660000 468000 660000 656000