Tempo Company's fixed budget (based on sales of 12,000 units) folllows. Fixed Budget Sales (12,000 units × $216 per unit) Costs Direct materials Direct labor 2,592,000 Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation–0ffice equipment Insurance 300,000 504,000 324,000 100,000 96,000 192,000 150,000 120,000 90,000 100,000 Office rent Income 616,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 10,000 units and 14,000 units.

Tempo Company's fixed budget (based on sales of 12,000 units) folllows. Fixed Budget Sales (12,000 units × $216 per unit) Costs Direct materials Direct labor 2,592,000 Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation–0ffice equipment Insurance 300,000 504,000 324,000 100,000 96,000 192,000 150,000 120,000 90,000 100,000 Office rent Income 616,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 10,000 units and 14,000 units.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Tempo Company's fixed budget (based on sales of 10,000 units) folllows. Fixed Budget Sales (10,000 units × $219 per unit) 2,190,000 Costs Direct materials 250,000 Direct labor 440,000 Indirect materials 260,000 Supervisor salary 50,000 Sales commissions 80,000 Shipping 150,000 Administrative salaries 100,000 Depreciation—Office equipment 70,000 Insurance 40,000 Office rent 50,000 Income 700,000 1. Compute total variable cost per unit.2. Compute total fixed costs.3. Prepare a flexible budget at activity levels of 8,000 units and 12,000 units.
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