Exercise 21-3 (Algo) Preparing flexible budgets LO P1

Tempo Company's fixed budget (based on sales of 12,000 units) folllows.

Fixed Budget
Sales (12,000 units $216 per unit)	2,592,000
Costs
Direct materials	288,000
Direct labor	504,000
Indirect materials	324,000
Supervisor salary	88,000
Sales commissions	108,000
Shipping	180,000
Administrative salaries	138,000
DepreciationOffice equipment	108,000
Insurance	78,000
Office rent	88,000
Income	688,000

1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 10,000 units and 14,000 units.

Compute total variable cost per unit.

Total variable cost per unit

Compute total fixed costs.

Total fixed costs

Prepare a flexible budget at activity levels of 10,000 units and 14,000 units.

TEMPO COMPANY
	Flexible Budget		Flexible Budget for:
	Variable Amount per Unit	Total Fixed Cost	Units Sales of 10,000	Unit Sales of 14,000
Variable costs
Fixed costs