Exercise 8-3 (Algo) Preparing flexible budgets LO P1 Tempo Company's fixed budget (based on sales of 18,000 units) folllows. Fixed Budget Sales (18,000 units $219 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary. Sales commissions. Shipping Administrative salaries Depreciation-Office equipment Insurance Office rent Income 3,942,000 432,000 774,000 486,000 232,000 144,000 252,000 282,000 252,000 222,000 232,000 634,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 16,000 units and 20,000 units.
Exercise 8-3 (Algo) Preparing flexible budgets LO P1 Tempo Company's fixed budget (based on sales of 18,000 units) folllows. Fixed Budget Sales (18,000 units $219 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary. Sales commissions. Shipping Administrative salaries Depreciation-Office equipment Insurance Office rent Income 3,942,000 432,000 774,000 486,000 232,000 144,000 252,000 282,000 252,000 222,000 232,000 634,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 16,000 units and 20,000 units.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Exercise 8-3 (Algo) Preparing flexible budgets LO P1
Tempo Company's fixed budget (based on sales of 18,000 units) folllows.
Fixed Budget
Sales (18,000 units $219 per unit)
Costs
Direct materials
Direct labor
Indirect materials.
Supervisor salary
Sales commissions
Shipping
Administrative salaries
Depreciation-Office equipment
Insurance.
Office rent
Income
Required 1
1. Compute total variable cost per unit.
2. Compute total fixed costs.
3. Prepare a flexible budget at activity levels of 16,000 units and 20,000 units.
Complete this question by entering your answers in the tabs below.
Compute total fixed costs.
Total fixed costs
Required 2 Required 3
3,942,000
Required 1 Required 2
Variable costs
Fixed costs
432,000
774,000
486,000
232,000
144,000
252,000
282,000
252,000
< Required 1
1. Compute total variable cost per unit.
2. Compute total fixed costs.
3. Prepare a flexible budget at activity levels of 16,000 units and 20,000 units.
Required 3
222,000
232,000
634,000
Complete this question by entering your answers in the tabs below.
Prepare a flexible budget at activity levels of 16,000 units and 20,000 units.
TEMPO COMPANY
Required 3 >
Flexible Budget
Variable Amount Total Fixed
per Unit
Cost
Flexible Budget for:
Unit Sales of
20,000
Units Sales
of 16,000
Transcribed Image Text:Exercise 8-3 (Algo) Preparing flexible budgets LO P1
Tempo Company's fixed budget (based on sales of 18,000 units) folllows.
Fixed Budget
Sales (18,000 units $219 per unit)
Costs
Direct materials.
Direct labor
Indirect materials
Supervisor salary.
Sales commissions.
Shipping
x
Administrative salaries
Depreciation-Office equipment
Insurance
Office rent
Income
1. Compute total variable cost per unit.
2. Compute total fixed costs.
3. Prepare a flexible budget at activity levels of 16,000 units and 20,000 units.
Required 1 Required 2 Required 3
Complete this question by entering your answers in the tabs below.
Compute total variable cost per unit.
3,942,000
Total variable cost per unit
432,000
774,000
486,000
232,000
144,000
252,000
282,000
252,000
222,000
232,000
634,000
Required
Required 2 >
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