Exercise 8-2 Preparation of flexible budgets LO P1 Tempo Company's fixed budget (based on sales of 10,000 units) for the first quarter of calendar year 2015 reveals the following. Fixed Budget Sales (10,000 units) $2,020,000 Cost of goods sold Direct materials $240,000 430,000 irect labor Production supplies 280,000 Plant manager salary 40,000 990,000 Gross profit 1,030,000 Selling expenses Sales commissions 70,000 Packaging 150,000 100,000 320,000 Advertising Administrative expenses Administrative salaries 90,000 Depreciation-office equip. 60,000 Insurance 30,000 Office rent 40,000 220.000 Income from operations 490,000