empo Company's fixed budget (based on sales of 7,000 units) for the first quarter reveals the following. Fixed Budget Sales (7,000 units × $400 per unit) $ 2,800,000 Cost of goods sold Direct materials $ 280,000 Direct labor 490,000 Production supplies 175,000 Plant manager salary 65,000 1,010,000 Gross profit 1,790,000 Selling expenses Sales commissions 140,000 Packaging 154,000 Advertising 125,000 419,000 Administrative expenses Administrative salaries 85,000 Depreciation—office equip. 35,000 Insurance 20,000 Office rent 36,000 176,000 Income from operations $ 1,195,000 (1) Compute the total variable cost per unit. (2) Compute the total fixed costs. (3) Compute the income from operations for sales volume of 6,000 units. (4) Compute the income from operations for sales volume of 8,000 units.
empo Company's fixed budget (based on sales of 7,000 units) for the first quarter reveals the following. Fixed Budget Sales (7,000 units × $400 per unit) $ 2,800,000 Cost of goods sold Direct materials $ 280,000 Direct labor 490,000 Production supplies 175,000 Plant manager salary 65,000 1,010,000 Gross profit 1,790,000 Selling expenses Sales commissions 140,000 Packaging 154,000 Advertising 125,000 419,000 Administrative expenses Administrative salaries 85,000 Depreciation—office equip. 35,000 Insurance 20,000 Office rent 36,000 176,000 Income from operations $ 1,195,000 (1) Compute the total variable cost per unit. (2) Compute the total fixed costs. (3) Compute the income from operations for sales volume of 6,000 units. (4) Compute the income from operations for sales volume of 8,000 units.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Tempo Company's fixed budget (based on sales of 7,000 units) for the first quarter reveals the following.
| Fixed Budget | ||||||||
| Sales (7,000 units × $400 per unit) | $ | 2,800,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 280,000 | ||||||
| Direct labor | 490,000 | |||||||
| Production supplies | 175,000 | |||||||
| Plant manager salary | 65,000 | 1,010,000 | ||||||
| Gross profit | 1,790,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 140,000 | |||||||
| Packaging | 154,000 | |||||||
| Advertising | 125,000 | 419,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 85,000 | |||||||
| 35,000 | ||||||||
| Insurance | 20,000 | |||||||
| Office rent | 36,000 | 176,000 | ||||||
| Income from operations | $ | 1,195,000 | ||||||
(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 6,000 units.
(4) Compute the income from operations for sales volume of 8,000 units.
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