Tempo Company's fixed budget (based on sales of 12,000 units) for the first quarter reveals the following. Fixed Budget Sales (12,000 units × $206 per unit) $ 2,472,000 Cost of goods sold Direct materials $ 288,000 Direct labor 504,000 Production supplies 312,000 Plant manager salary 88,000 1,192,000 Gross profit 1,280,000 Selling expenses Sales commissions 84,000 Packaging 180,000 Advertising 100,000 364,000 Administrative expenses Administrative salaries 138,000 Depreciation—office equip. 108,000 Insurance 78,000 Office rent 88,000 412,000 Income from operations $ 504,000 (1) Compute the income from operations for sales volume of 10,000 units. (2) Compute the income from operations for sales volume of 14,000 units.
Tempo Company's fixed budget (based on sales of 12,000 units) for the first quarter reveals the following. Fixed Budget Sales (12,000 units × $206 per unit) $ 2,472,000 Cost of goods sold Direct materials $ 288,000 Direct labor 504,000 Production supplies 312,000 Plant manager salary 88,000 1,192,000 Gross profit 1,280,000 Selling expenses Sales commissions 84,000 Packaging 180,000 Advertising 100,000 364,000 Administrative expenses Administrative salaries 138,000 Depreciation—office equip. 108,000 Insurance 78,000 Office rent 88,000 412,000 Income from operations $ 504,000 (1) Compute the income from operations for sales volume of 10,000 units. (2) Compute the income from operations for sales volume of 14,000 units.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Tempo Company's fixed budget (based on sales of 12,000 units) for the first quarter reveals the following.
| Fixed Budget | ||||||||
| Sales (12,000 units × $206 per unit) | $ | 2,472,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 288,000 | ||||||
| Direct labor | 504,000 | |||||||
| Production supplies | 312,000 | |||||||
| Plant manager salary | 88,000 | 1,192,000 | ||||||
| Gross profit | 1,280,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 84,000 | |||||||
| Packaging | 180,000 | |||||||
| Advertising | 100,000 | 364,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 138,000 | |||||||
| 108,000 | ||||||||
| Insurance | 78,000 | |||||||
| Office rent | 88,000 | 412,000 | ||||||
| Income from operations | $ | 504,000 | ||||||
(1) Compute the income from operations for sales volume of 10,000 units.
(2) Compute the income from operations for sales volume of 14,000 units.
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