Question

Tempo Company's fixed budget (based on sales of 16.000 units) for the first quarter reveals the following. Complete this question by entering your answers in the tabs below. Fixed Budget $3,344,000 Required 1 Required 2 Required 3 Required 4 Compute the income from operations for sales volume of 14,000 units. $384,000 672,000 432,000 184,000 Income from operations at sales of 14,000 units 1,672,000 1,672,000 < Required 2 Required 4 > Sales (16,000 units * $209 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 128,000 240,000 100,000 468,000 Complete this question by entering your answers in the tabs below. 234,000 204,000 174,000 184,000 Required 1 Required 2 Required 3 Required 4 796,000 $ 400,000 Compute the income from operations for sales volume of 18,000 units. Income from operations at sales of 18,000 units (1) Compute the total variable cost per unit. (2) Compute the total fixed costs. (3) Compute the income from operations for sales volume of 14,000 units. (4) Compute the income from operations for sales volume of 18.000 units. < Required 3 Required 4 ) 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 Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the total fixed costs. otal fixed costs Required 1 Required 3 >

Answer 1

TEMPO COMPANY
Flexible Budgets
	------Flexible Budget------		------Flexible Budget at ------
	Variable Amount per Unit	Total Fixed Cost	14,000 units	16,000 units	18,000 units
Sales	209		2,926,000	3,344,000	3,762,000
Variable costs:
Direct materials	24		336,000	384,000	432,000
Direct labor	42		588,000	672,000	756,000
Production supplies	27		378,000	432,000	486,000
Sales commissions	8		112,000	128,000	144,000
Packaging	15		210,000	240,000	270,000
Total variable costs	116		1624000	1856000	2088000
Contribution margin	93		1,302,000	1,488,000	1,674,000
Fixed costs:
Plant manager salary		184,000	184,000	184,000	184,000
Advertising		100,000	100,000	100,000	100,000
Administrative salaries		234,000	234,000	234,000	234,000
Depreciation—office equip.		204,000	204,000	204,000	204,000
Insurance		174,000	174,000	174,000	174,000
Office rent		184,000	184,000	184,000	184,000
Total fixed costs		1,080,000	1,080,000	1,080,000	1,080,000
Income from operations			222,000	408,000	594,000
a
Variable cost per unit	116
b
Total fixed costs	1,080,000
c
Income from operations at 14000 units	222,000
d
Income from operations at 18000 units	594,000