Tempo Company\'s fixed budget (based on sales of 16,000 units) for the first qua

Question

Tempo Company's fixed budget (based on sales of 16,000 units) for the first quarter of calendar year 2017 reveals the following.

Complete the following flexible budgets for sales volumes of 14,000, 16,000, and 18,000 units. (Round cost per unit to 2 decimal places.)

Fixed Budget Sales (16,000 units) $ 3,408,000 Cost of goods sold Direct materials $ 384,000 Direct labor 688,000 Production supplies 432,000 Plant manager salary 184,000 1,688,000 Gross profit 1,720,000 Selling expenses Sales commissions 128,000 Packaging 240,000 Advertising 100,000 468,000 Administrative expenses Administrative salaries 234,000 Depreciation—office equip. 204,000 Insurance 174,000 Office rent 184,000 796,000 Income from operations $ 456,000

Explanation / Answer

Flexible Budget variable total 14,000 16,000 18,000 amount fixed cost units units units per unit Sales 213 2982000 3408000 3834000 Variable costs: Direct materials 24 336000 384000 432000 direct labor 43 602000 688000 774000 production supplies 27 378000 432000 486000 Sales commissions 8 112000 128000 144000 packaging 15 210000 240000 270000 total variable costs 117 1638000 1872000 2106000 contribution margin 96 1344000 1536000 1728000 Fixed costs : plant manager salary 184,000 184,000 184,000 184,000 Advertising 100,000 100,000 100,000 100,000 Administrative salaries 234,000 234,000 234,000 234,000 Depreciation -office Equip 204,000 204,000 204,000 204,000 insurance 174,000 174,000 174,000 174,000 office rent 184,000 184,000 184,000 184,000 total fixed costs 1,080,000 1,080,000 1,080,000 1,080,000 income from operations 264,000 456,000 648,000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.