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Tempo Company's fixed budget (based on sales of 18,000 units) for the first quarter reveals the following. Fixed Budget Sales (18,000 units $210 per

Tempo Company's fixed budget (based on sales of 18,000 units) for the first quarter reveals the following.

Fixed Budget

Sales (18,000 units Ă— $210 per unit)

$

3,780,000

Cost of goods sold

Direct materials

$

432,000

Direct labor

774,000

Production supplies

504,000

Plant manager salary

232,000

1,942,000

Gross profit

1,838,000

Selling expenses

Sales commissions

162,000

Packaging

288,000

Advertising

100,000

550,000

Administrative expenses

Administrative salaries

282,000

Depreciation—office equip.

252,000

Insurance

222,000

Office rent

232,000

988,000

Income from operations

$

300,000


(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 16,000 units.
(4) Compute the income from operations for sales volume of 20,000 units.

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