Help Save & Exit Tempo Company\'s fixed budget (based on sales of 12,000 units)
ID: 2519563 • Letter: H
Question
Help Save & Exit Tempo Company's fixed budget (based on sales of 12,000 units) for the first quarter of calendar year 2017 reveals the following. Pixed Budget Sales (12,000 units) Cost of goods sold $2,568,000 Direct materials Direct labor Production supplies Plant manager salary $276,000 516,000 324,000 76,0001,192,000 Gross profit Selling expenses 1,376,000 Sales commissions 96,000 192,000 Packaging Advertising Administrative salarles Depreciation-office equip office rent 100,000388,000 Administrative expenses 126,000 6,000 66,000 364,000 624,000 Income from operations Complete the following flexible budgets for sales volumes of 10,000, 12,000, and 14,000 units. (Round cost per unit to 2 decimal places.) Flexible Budgets For Quarter Ended March 31, 2017 Flexible Budgot Flexible Budget at 14,000 Variable Total Fixed 10,000 units 12,000 unitsunits Amount perExplanation / Answer
Flexible budgets for sales volume of 10,000; 12,000 and 14,000 units
Tempo Company
Flexible Budgets
Flexible Budget
Flexible Budget
Variable Amount per unit
Total Fixed Cost
10,000 units
12,000 units
14,000 units
Sales
$214
$2,140,000
$2,568,000
$2,996,000
Variable Costs:
Direct materials
$23
$230,000
$276,000
$322,000
Direct labor
$43
$430,000
$516,000
$602,000
Production Supplies
$27
$270,000
$324,000
$378,000
Sales Commissions
$8
$80,000
$96,000
$112,000
Packaging
$16
$160,000
$192,000
$224,000
Total variable costs
$117
$1,170,000
$1,404,000
$1,638,000
Contribution margin
$97
$970,000
$1,164,000
$1,358,000
Fixed costs:
Plant manager's salary
$76,000
$76,000
$76,000
$76,000
Advertising
$100,000
$100,000
$100,000
$100,000
Administrative salaries
$126,000
$126,000
$126,000
$126,000
Depreciation - office equipment
$96,000
$96,000
$96,000
$96,000
Insurance
$66,000
$66,000
$66,000
$66,000
Office Rent
$76,000
$76,000
$76,000
$76,000
Total fixed cost
$540,000
$540,000
$540,000
$540,000
Income from Operations
$430,000
$624,000
$818,000
The variable amounts per unit are calculated as follows:
Sales price per unit = $2,568,000/12,000 = $214
Direct materials = $276,000/12,000 = $23
Direct labor = $516,000/12,000 = $43
Production supplies = $324,000/12,000 = $27
Sales commissions = $96,000/12,000 = $8
Packaging = $192,000/12,000 = $16
Fixed costs include plant manager’s salary, advertising, administrative salaries, depreciation – office equipment, insurance and office rent. These expenses remain constant at any level of activity.
Tempo Company
Flexible Budgets
Flexible Budget
Flexible Budget
Variable Amount per unit
Total Fixed Cost
10,000 units
12,000 units
14,000 units
Sales
$214
$2,140,000
$2,568,000
$2,996,000
Variable Costs:
Direct materials
$23
$230,000
$276,000
$322,000
Direct labor
$43
$430,000
$516,000
$602,000
Production Supplies
$27
$270,000
$324,000
$378,000
Sales Commissions
$8
$80,000
$96,000
$112,000
Packaging
$16
$160,000
$192,000
$224,000
Total variable costs
$117
$1,170,000
$1,404,000
$1,638,000
Contribution margin
$97
$970,000
$1,164,000
$1,358,000
Fixed costs:
Plant manager's salary
$76,000
$76,000
$76,000
$76,000
Advertising
$100,000
$100,000
$100,000
$100,000
Administrative salaries
$126,000
$126,000
$126,000
$126,000
Depreciation - office equipment
$96,000
$96,000
$96,000
$96,000
Insurance
$66,000
$66,000
$66,000
$66,000
Office Rent
$76,000
$76,000
$76,000
$76,000
Total fixed cost
$540,000
$540,000
$540,000
$540,000
Income from Operations
$430,000
$624,000
$818,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.