Exercise 8-3 (Algo) Preparing flexible budgets LO P1

Tempo Company's fixed budget (based on sales of 18,000 units) folllows.

Fixed Budget
Sales (18,000 units $217 per unit)	3,906,000
Costs
Direct materials	432,000
Direct labor	774,000
Indirect materials	486,000
Supervisor salary	232,000
Sales commissions	126,000
Shipping	252,000
Administrative salaries	282,000
DepreciationOffice equipment	252,000
Insurance	222,000
Office rent	232,000
Income	616,000

1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 16,000 units and 20,000 units.

Complete this question by entering your answers in the tabs below.

Required 1

Required 2

Required 3

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 16,000 units and 20,000 units.

TEMPO COMPANY
	Flexible Budget		Flexible Budget for:
	Variable Amount per Unit	Total Fixed Cost	Units Sales of 16,000	Unit Sales of 20,000
Variable costs
Fixed costs