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In: Accounting

Tempo Company's fixed budget (based on sales of 18,000 units) for the first quarter reveals the...

Tempo Company's fixed budget (based on sales of 18,000 units) for the first quarter reveals the following.

(1)Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 16,000 units.
(4) Compute the income from operations for sales volume of 20,000 units.

Fixed Budget
Sales (18,000 units × $214 per unit) $ 3,852,000
Cost of goods sold
Direct materials $ 450,000
Direct labor 774,000
Production supplies 504,000
Plant manager salary 250,000 1,978,000
Gross profit 1,874,000
Selling expenses
Sales commissions 144,000
Packaging 270,000
Advertising 100,000 514,000
Administrative expenses
Administrative salaries 300,000
Depreciation—office equip. 270,000
Insurance 240,000
Office rent 250,000 1,060,000
Income from operations $ 300,000

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Expert Solution

ekkarill92 answered 2 years ago
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