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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.

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Expert Solution

ekkarill92 answered 1 year ago
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