Question
In: Accounting
Based on a predicted level of production and sales of 16,000 units, a company anticipates reporting...
Based on a predicted level of production and sales of 16,000 units, a company anticipates reporting operating income of $22,000 after deducting variable costs of $96,000 and fixed costs of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for 18,000 units would be:
Solutions
Expert Solution
Variable cost = $108,000
Fixed cost = $10,000
Explanation:
Variable cost per unit = Variable cost for producing 16,000 units / Total number of units
= $96,000 / 16,000 units
= $6
Therefore,
Variable cost (18,000 units) = Units produced * Variable cost per unit
= 18,000 units * $6
= $108,000
As the fixed cost does not vary with the number of units produced, total fixed cost shall remain unchanged.
ekkarill92 answered 1 month agoRelated Solutions
Tempo Company's fixed budget (based on sales of 16,000 units) for the first quarter reveals the...
Tempo Company's fixed budget (based on sales of 16,000 units)
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Fixed Budget
Sales (16,000 units × $209 per unit)
$
3,344,000
Cost of goods sold
Direct materials
$
400,000
Direct labor
688,000
Production supplies
448,000
Plant manager salary
200,000
1,736,000
Gross profit
1,608,000
Selling expenses
Sales commissions
128,000
Packaging
240,000
Advertising
100,000
468,000
Administrative expenses
Administrative salaries
250,000
Depreciation—office equip.
220,000
Insurance
190,000
Office rent
200,000
860,000
Income from operations
$
280,000
(1)...
Tempo Company's fixed budget (based on sales of 16,000 units) for the first quarter reveals the...
Tempo Company's fixed budget (based on sales of 16,000 units)
for the first quarter reveals the following.
Fixed Budget
Sales (16,000 units × $216 per unit)
$
3,456,000
Cost of goods sold
Direct materials
$
400,000
Direct labor
672,000
Production supplies
432,000
Plant manager salary
200,000
1,704,000
Gross profit
1,752,000
Selling expenses
Sales commissions
128,000
Packaging
256,000
Advertising
100,000
484,000
Administrative expenses
Administrative salaries
250,000
Depreciation—office equip.
220,000
Insurance
190,000
Office rent
200,000
860,000
Income from operations
$
408,000
(1)...
Tempo Company's fixed budget (based on sales of 16,000 units) for the first quarter reveals the...
Tempo Company's fixed budget (based on sales of 16,000 units)
for the first quarter reveals the following.
Fixed Budget
Sales (16,000 units × $202 per unit)
$
3,232,000
Cost of goods sold
Direct materials
$
400,000
Direct labor
688,000
Production supplies
448,000
Plant manager salary
200,000
1,736,000
Gross profit
1,496,000
Selling expenses
Sales commissions
128,000
Packaging
224,000
Advertising
100,000
452,000
Administrative expenses
Administrative salaries
250,000
Depreciation—office equip.
220,000
Insurance
190,000
Office rent
200,000
860,000
Income from operations
$
184,000
(1)...
Tempo Company's fixed budget (based on sales of 16,000 units) for the first quarter of calendar...
Tempo Company's fixed budget (based on sales of 16,000 units)
for the first quarter of calendar year 2017 reveals the
following.
Fixed Budget
Sales (16,000 units)
$
3,408,000
Cost of goods sold
Direct materials
$
384,000
Direct labor
688,000
Production supplies
432,000
Plant manager salary
184,000
1,688,000
Gross profit
1,720,000
Selling expenses
Sales commissions
128,000
Packaging
240,000
Advertising
100,000
468,000
Administrative expenses
Administrative salaries
234,000
Depreciation—office equip.
204,000
Insurance
174,000
Office rent
184,000
796,000
Income from operations
$
456,000
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Coleman, Inc. anticipates sales of 48,000 units, 46,000 units, 49,000 units and 48,000 units in July,...
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1. Harwinton, Inc. anticipates sales of 48,000 units, 46,000
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At an output level of 16,000 units, you have calculated that the degree of operating leverage...
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