Ch 08 Ex 8-2 6 Saved Help Save & Exit Submit Check my work Exercise 8-2 Preparin

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Ch 08 Ex 8-2 6 Saved Help Save & Exit Submit Check my work Exercise 8-2 Preparing flexible budgets LO P1 Tempo Company's fixed budget (based on sales of 10,000 units) for the first quarter of calendar year 2017 reveals the following 15 points Fixed Budget Sales (10,000 units) Cost of goods sold $2,130,000 Direct materials Direct labor Production supplies Plant manager salary $240,00e 430,00e 280,000 40.000 eBook 990,000 1,140,00e Gross profit Selling expenses Hint Sales commissions Packaging Advertising 80,000 150,000 100,00 330,000 Ask Administrative expenses Administrative salaries Depreciation-office equip Insurance Office rent 90,000 60,000 30,000 40,000 220, Print Income from operations $590,000 References Complete the following flexible budgets for sales volumes of 8,000,10,000, and 12,000 units. (Round cost per unit to 2 decimal places.)

Explanation / Answer

TEMPO COMPANY Flexible Budgets For Quarter Ended March 31, 2017 ------Flexible Budget------ ------Flexible Budget at ------ Variable Amount per Unit Total Fixed Cost 8,000 units 10,000 units 12,000 units Sales $213.00 $1,704,000 $2,130,000 $2,556,000 Variable costs: Direct materials 24 $192,000 $240,000 $288,000 Direct labor 43 $344,000 $430,000 $516,000 Production supplies 28 $224,000 $280,000 $336,000 Sales commissions 8 $64,000 $80,000 $96,000 Packaging 15 $120,000 $150,000 $180,000 Total variable costs 118 944000 1180000 1416000 Contribution margin $95.00 760,000 950,000 1,140,000 Fixed costs: Plant manager salary 40,000 40,000 40,000 40,000 Advertising 100,000 100,000 100,000 100,000 Administrative salaries 90,000 90,000 90,000 90,000 Depreciation—office equip. 60,000 60,000 60,000 60,000 Insurance 30,000 30,000 30,000 30,000 Office rent 40,000 40,000 40,000 40,000 Total fixed costs 360,000 360,000 360,000 360,000 Income from operations $400,000 $590,000 $780,000

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