Tempo Company's fixed budget (based on sales of 14,000 units) for the first quarter reveals the following. Sales (14,000 units × $215 per unit) $ 3,010,000 Cost of goods sold Direct materials $ 322,000 Direct labor 588,000 Production supplies 392,000 Plant manager salary 122,000
Tempo Company's fixed budget (based on sales of 14,000 units) for the first quarter reveals the following. Sales (14,000 units × $215 per unit) $ 3,010,000 Cost of goods sold Direct materials $ 322,000 Direct labor 588,000 Production supplies 392,000 Plant manager salary 122,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Tempo Company's fixed budget (based on sales of 14,000 units) for the first quarter reveals the following.
| Sales (14,000 units × $215 per unit) | $ | 3,010,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 322,000 | ||||||
| Direct labor | 588,000 | |||||||
| Production supplies | 392,000 | |||||||
| Plant manager salary | 122,000 | 1,424,000 | ||||||
| Gross profit | 1,586,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 112,000 | |||||||
| Packaging | 224,000 | |||||||
| Advertising | 100,000 | 436,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 172,000 | |||||||
| 142,000 | ||||||||
| Insurance | 112,000 | |||||||
| Office rent | 122,000 | 548,000 | ||||||
| Income from operations | $ | 602,000 | ||||||
Total variable cost per unit = 117
Total fixed cost per unit = 770,000
Questions:
Compute the income from operations for sales volume of 12,000 units.
Compute the income from operations for sales volume of 16,000 units.
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