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

Fixed Budget

Sales (12,000 units $215 per unit) 2,580,000 Costs Direct materials 288,000 Direct labor 516,000 Indirect materials 324,000 Supervisor salary 88,000 Sales commissions 84,000 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.