Tempo Company's fixed budget (based on sales of 14,000 units) folllows.

Fixed Budget
Sales (14,000 units $202 per unit)	2,828,000
Costs
Direct materials	336,000
Direct labor	602,000
Indirect materials	378,000
Supervisor salary	136,000
Sales commissions	112,000
Shipping	210,000
Administrative salaries	186,000
DepreciationOffice equipment	156,000
Insurance	126,000
Office rent	136,000
Income	450,000

1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.

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• Required 1
• Required 2
• Required 3

Compute total variable cost per unit.

Total variable cost per unit

$117

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• Required 1
• Required 2
• Required 3

Compute total fixed costs.

Total fixed costs

$740,000

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• Required 1
• Required 2
• Required 3

Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.

TEMPO COMPANY
	Flexible Budget		Flexible Budget for:
	Variable Amount per Unit	Total Fixed Cost	Units Sales of 12,000	Unit Sales of 16,000
Sales	$202.00		$2,424,000	$3,232,000
Variable costs
Direct materials
Direct labor
Indirect materials
Sales commissions
Shipping
	0.00		0	0
Contribution margin
Fixed costs
Supervisor salary
Administration salaries
DepreciationOffice equipment
Insurance
Office rent
		$0	$0	$0