Tempo Company\'s fixed budget (based on sales of 18,000 units) for the first qua

Question

Tempo Company's fixed budget (based on sales of 18,000 units) for the first quarter of calendar year 2017 reveals the following Fixed Budget Sales (18,eee units) Cost of goods sold $3,780,0ee Direct materials Direct labor Production supplies Plant manager salary $432,9ee 774,000 504,00e 232,0e0 points 1,942,0ee 1,838,0ee Gross profit selling expenses eBook Sales commissions Packaging Advertising 126,9ee 278,000 100,00e 496,9ee Administrative expenses Hint Administrative salaries Depreciation-office equip. Insurance Office rent 282,ee 252,800 222,60e 232,000988-960 Print Income from operations $354,0ee References Complete t he following flexible budgets for sales volumes of 16,000, 18,000, and 20,000 units. (Round cost per unit to 2 declmal places.) TEMPO COMPANY Flexible Budgets For Quarter Ended March 31, 2017 Flexible Budget Flexible Budget at-- Variable Amount per Unit 20,000 Total Fixed 16.000 units 18,000 units units Cost Variable costs Fixed costs

Explanation / Answer

TEMPO COMPANY Flexible Budgets For Quarter Ended March 31, 2017 ------Flexible Budget------ ------Flexible Budget at ------ Variable Amount per Unit Total Fixed Cost 16,000 units 18,000 units 20,000 units Sales $210 $3,360,000 $3,780,000 $4,200,000 Variable costs: Direct materials 24 $384,000 $432,000 $480,000 Direct labor 43 $688,000 $774,000 $860,000 Production supplies 28 $448,000 $504,000 $560,000 Sales commissions 7 $112,000 $126,000 $140,000 Packaging 15 $240,000 $270,000 $300,000 Total variable costs 117 1872000 2106000 2340000 Contribution margin $93.00 $1,488,000 $1,674,000 $1,860,000 Fixed costs: Plant manager salary 232,000 232,000 232,000 232,000 Advertising 100,000 100,000 100,000 100,000 Administrative salaries 282,000 282,000 282,000 282,000 Depreciation—office equip. 252,000 252,000 252,000 252,000 Insurance 222,000 222,000 222,000 222,000 Office rent 232,000 232,000 232,000 232,000 Total fixed costs 1,320,000 1,320,000 1,320,000 1,320,000 Income from operations $168,000 $354,000 $540,000

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