Tempo Company's fixed budget (based on sales of 14,000 units) folllows. Fixed Budget Sales (14,000 units × $218 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation Office equipment Insurance Office rent Income 3,052,000 350,000 602,000 378,000 150,000 98,000 210,000 200,000 170,000 140,000 150,000 604,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.
Tempo Company's fixed budget (based on sales of 14,000 units) folllows. Fixed Budget Sales (14,000 units × $218 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation Office equipment Insurance Office rent Income 3,052,000 350,000 602,000 378,000 150,000 98,000 210,000 200,000 170,000 140,000 150,000 604,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
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Transcribed Image Text:Tempo Company's fixed budget (based on sales of 14,000 units) folllows.
Sales (14,000 units
Costs
Direct materials
Direct labor
Indirect materials
Supervisor salary
Sales commissions
Shipping
Administrative salaries
Depreciation-office equipment.
Insurance
Office rent
Income
Fixed Budget
x $218 per unit)
1. Compute total variable cost per unit.
2. Compute total fixed costs.
3. Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.
3,052,000
350,000
602,000
378,000
150,000
98,000
210,000
200,000
170,000
140,000
150,000
604,000
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Compute total variable cost per unit.
Total variable cost per unit
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute total fixed costs.
Total fixed costs
Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.
Variable costs
Required 3
Fixed costs
TEMPO COMPANY
Flexible Budget
Variable Amount Total Fixed
per Unit
Cost
< Required 2
Flexible Budget for:
Units Sales Unit Sales of
of 12,000 16,000
Required 3 >
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