Exercise 21-3 Preparing flexible budgets LO P1 Tempo Company's fixed budget (based on sales of 10,000...

Exercise 21-3 Preparing flexible budgets LO P1

Tempo Company's fixed budget (based on sales of 10,000 units) for the first quarter reveals the following.

	Fixed Budget
Sales (10,000 units × $203 per unit)				$	2,030,000
Cost of goods sold
Direct materials		$	240,000
Direct labor			420,000
Production supplies			260,000
Plant manager salary			40,000		960,000
Gross profit					1,070,000
Selling expenses
Sales commissions			90,000
Packaging			150,000
Advertising			100,000		340,000
Administrative expenses
Administrative salaries			90,000
Depreciation—office equip.			60,000
Insurance			30,000
Office rent			40,000		220,000
Income from operations				$	510,000

(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 8,000 units.
(4) Compute the income from operations for sales volume of 12,000 units.

Solutions

Expert Solution

ekkarill92 answered 10 months ago

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