Monday, 9 February 2015

Tempo Company's fixed budget for the first quarter of calendar year 2013 reveals the following.

Tempo Company's fixed budget for the first quarter of calendar year 2013 reveals the following.
 
                    
  Sales (12,000 units)           $ 2,424,000  
  Cost of goods sold                
       Direct materials   $ 276,600          
       Direct labor     515,280          
       Production supplies     318,360          
       Plant manager salary     76,600       1,186,840  
    

   

 
  Gross profit             1,237,160  
  Selling expenses                
       Sales commissions     105,600          
       Packaging     184,080          
       Advertising     100,000       389,680  
    

         
  Administrative expenses                
       Administrative salaries     126,600          
       Depreciation—office equip.     96,600          
       Insurance     66,600          
       Office rent     76,600       366,400  
    

   

 
  Income from operations           $ 481,080  
            



 

 
Prepare flexible budgets that show variable costs per unit, fixed costs, and three different flexible budgets for sales volumes of 10,000, 12,000, and 14,000 units. (Round cost per unit to 2 decimal places.)
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Explanation: