Question

Exercise 21-2 Preparing flexible budgets LO P1

Tempo Company's fixed budget (based on sales of 14,000 units) for the first quarter of calendar year 2017 reveals the following.

	Fixed Budget
Sales (14,000 units)						$	2,856,000
Cost of goods sold
Direct materials		$	350,000
Direct labor			616,000
Production supplies			364,000
Plant manager salary			150,000				1,480,000
Gross profit							1,376,000
Selling expenses
Sales commissions			112,000
Packaging			210,000
Advertising			100,000				422,000
Administrative expenses
Administrative salaries			200,000
Depreciation—office equip.			170,000
Insurance			140,000
Office rent			150,000				660,000
Income from operations						$	294,000

Complete the following flexible budgets for sales volumes of 12,000, 14,000, and 16,000 units. (Round cost per unit to 2 decimal places.)

Tempo Company

Flexible Budgets

For Quarter Ended March 31, 2017

-----FlexIble Budget----- -------Flexible Budget at------

Variable Amount per Unit Total Fixe Cost 12,000 units 14,000 units 16,000 units

1)

2) Variable Costs:

3)

4)

5)

7)

8)

9)

10)

11) Fixed Costs

12)

13)

14)

15)

16)

17)

18)

19)

20)

Answer 1