Tempo Company's fixed budget (based on sales of 16,000 units) folllows. Fixed Budget Sales (16,000 units $215 per unit) Costs Direct materials. Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation-Office equipment Insurance Office rent Income 3,440,000 400,000 672,000 448,000 200,000 144,000 240,000 250,000 220,000 190,000 200,000 476,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 14,000 units and 18,000 units.
Tempo Company's fixed budget (based on sales of 16,000 units) folllows. Fixed Budget Sales (16,000 units $215 per unit) Costs Direct materials. Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation-Office equipment Insurance Office rent Income 3,440,000 400,000 672,000 448,000 200,000 144,000 240,000 250,000 220,000 190,000 200,000 476,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 14,000 units and 18,000 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:es
Required 3
Prepare a flexible budget at activity levels of 14,000 units and 18,000 units.
Required 1 Required 2
Sales
Variable costs
Direct materials
Direct labor
Indirect materials
Sales commissions
Shipping
Total variable costs
Contribution margin
Fixed costs
Supervisor salary
Administration salaries
Depreciation Office equipment
Insurance
Office rent
Total fixed costs
Income
TEMPO COMPANY
Flexible Budget
Variable Amount
per Unit
$
215.00
< Required 2
0.00
Total Fixed
Cost
$
Flexible Budget for:
Unit Sales
of 18,000
Units Sales
of 14,000
0 $
0
0 $
0
Transcribed Image Text:Tempo Company's fixed budget (based on sales of 16,000 units) folllows.
Fixed Budget
x $215 per unit)
Sales (16,000 units
Costs
Direct materials
Direct labor
Indirect materials
Supervisor salary
Sales commissions
Shipping
Administrative salaries.
Depreciation-Office equipment
Insurance
Office rent
Income
3,440,000
400,000
672,000
448,000
200,000
144,000
240,000
250,000
220,000
190,000
200,000
476,000
1. Compute total variable cost per unit.
2. Compute total fixed costs.
3. Prepare a flexible budget at activity levels of 14,000 units and 18,000 units.
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