Tempo Company's fixed budget (based on sales of 14,000 units) follows. Fixed Budget Sales (14,000 units × $200 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation Office equipment Insurance Office rent Income 2,800,000 336,000 588,000 378,000 136,000 112,000 210,000 186,000 156,000 126,000 136,000 436,000 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) follows. Fixed Budget Sales (14,000 units × $200 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation Office equipment Insurance Office rent Income 2,800,000 336,000 588,000 378,000 136,000 112,000 210,000 186,000 156,000 126,000 136,000 436,000 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.
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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 14,000 units) folllows.
Fixed Budget
Sales (14,000 units × $200 per unit)
Costs
Direct materials
Direct labor
Indirect materials
Supervisor salary
Sales commissions
Shipping
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 12,000 units and 16,000 units.
Required 1
Complete this question by entering your answers in the tabs below.
Required 2 Required 3
2,800,000
Compute total variable cost per unit.
336,000
588,000
378,000
136,000
112,000
210,000
186,000
156,000
126,000
136,000
436,000
Total variable cost per unit
< Required 1
Required 2 >
Transcribed Image Text:Exercise 8-3 (Algo) Preparing flexible budgets LO P1
Tempo Company's fixed budget (based on sales of 14,000 units) folllows.
Fixed Budget
Sales (14,000 units * $200 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 Required 2 Required 3
Compute total fixed costs.
Total fixed costs
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.
2,800,000
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
336,000
588,000
378,000
136,000
112,000
< Required 1
Variable costs
210,000
186,000
156,000
Fixed costs
126,000
136,000
436,000
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.
Complete this question by entering your answers in the tabs below.
< Required 2
Prepare a flexible budget at activity levels of 12.000 units and 16,000 units.
TEMPO COMPANY
Required 3 >
Flexible Budget
Variable Amount Total Fixed
per Unit
Cost
Flexible Budget for:
Units Sales Unit Sales of
of 12,000 16,000
Required 3 >
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