Question 1 (of 2) 1. 5000 points value: Tempo Company\'s fixed budget (based on

Question

Question 1 (of 2) 1. 5000 points value: Tempo Company's fixed budget (based on sales of 18,000 units) for the first quarter of calendar year 2015 reveals the following Fixed Budget $3,924,000 Sales (18,000 units) Cost of goods sold $432,000 Direct materials Direct labor Production supplies Plant manager salary 792,000 468,000 232,000 1,924,000 Gross proft Selling expenses 2,000,000 Sales commissions Packaging Advertising 144,000 252,000 100,000 496,000 Administrative expenses Administrative salaries Depreciation-office equip Insurance Office rent 282,000 252,000 222,000 232,000 988,000 Income from operations $ 516,000 Complete the following flexible budgets for sales volumes of 16,000, 18,000, and 20,000 units. (Round cost per unit to 2 decimal places.)

Explanation / Answer

Flexible Budget Variable total 16,000 18,000 20,000 amount fixed cost units units units per unit Sales 218 3488000 3924000 4360000 variable expenses Direct materials 24 384000 432000 480000 direct labor 44 704000 792000 880000 production supplies 26 416000 468000 520000 Sales commission 8 128000 144000 160000 packaging 14 224000 252000 280000 total variable costs 116 1856000 2088000 2320000 Contribution margin 102 1632000 1836000 2040000 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 Equipment 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 cost 1,320,000 1,320,000 1,320,000 1,320,000 income from operations 312,000 516,000 720,000

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