Question

ܝ Tempo Company's fixed budget (based sales of 12,000 units) for the first quarter reveals the following. Fixed Budget $2,472,000 3 points $ 276,000 528,000 324,000 76,000 Skipped 1,204,000 1, 268,000 Sales (12,000 units X $206 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 84,000 168,000 100,000 352,000 eBook 126,000 96,000 66,000 76,000 Hint 364,000 552,000 Print (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

1
Total variable cost cost per unit = $115 (Ans)

2
Total Fixed cost = $540000 (Ans)

3
Income from operations for 10000 units sales volume = $370000 (Ans)

4
Income from operations for 14000 units sales volume = $734000 (Ans)

Working Notes:
All the above 4 questions can be answered by preparing a Flexible budget

Particulars	Fixed budget at 12000 units ($)	Variable amount per unit ($) (Fixed budget at 12000 units / 12000)	Fixed cost ($)	Fixed budget at 10000 units ($)	Fixed budget at 14000 units ($)
Sales	2472000	206	-	2060000	2884000
Variable costs::
Direct material	276000	23	-	230000	322000
Direct labor	528000	44	-	440000	616000
Production supplies	324000	27	-	270000	378000
Sales commission	84000	7	-	70000	98000
Packaging	168000	14	-	140000	196000
Total variable cost	1380000	115	-	1150000	1610000
Contribution margin	1092000	91	-	910000	1274000
Fixed costs
Plant manage	76000	-	76000	76000	76000
Advertising	100000	-	100000	100000	100000
Administrative salaries	126000	-	126000	126000	126000
Depreciation	96000	-	96000	96000	96000
Insurance	66000	-	66000	66000	66000
Office rent	76000	-	76000	76000	76000
Total Fixed costs	540000	-	540000	540000	540000
Income from operations	552000	-	-	370000	734000

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