In: Accounting
Exercise 8-2 Preparing flexible budgets LO P1
Tempo Company's fixed budget (based on sales of 12,000 units)
for the first quarter of calendar year 2017 reveals the
following.
Fixed Budget | ||||||||
Sales (12,000 units) | $ | 2,604,000 | ||||||
Cost of goods sold | ||||||||
Direct materials | $ | 300,000 | ||||||
Direct labor | 516,000 | |||||||
Production supplies | 324,000 | |||||||
Plant manager salary | 100,000 | 1,240,000 | ||||||
Gross profit | 1,364,000 | |||||||
Selling expenses | ||||||||
Sales commissions | 96,000 | |||||||
Packaging | 168,000 | |||||||
Advertising | 100,000 | 364,000 | ||||||
Administrative expenses | ||||||||
Administrative salaries | 150,000 | |||||||
Depreciation—office equip. | 120,000 | |||||||
Insurance | 90,000 | |||||||
Office rent | 100,000 | 460,000 | ||||||
Income from operations | $ | 540,000 | ||||||
Complete the following flexible budgets for sales volumes of
10,000, 12,000, and 14,000 units. (Round cost per unit to 2
decimal places.)
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