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

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

\begin{tabular}{lr} \multicolumn{1}{c}{ Fixed Budget } & \\ Sales (14,000 units $210 per & 2,940,000 \\ unit) & \\ Costs & 336,000 \\ Direct materials & 588,000 \\ Direct labor & 378,000 \\ Indirect materials & 136,000 \\ Supervisor salary & 98,000 \\ Sales commissions & 224,000 \\ Shipping & 186,000 \\ Administrative salaries & 156,000 \\ Depreciation-0ffice equipment & 126,000 \\ Insurance & 136,000 \\ \hline Office rent & 576,000 \\ \hline Income & \end{tabular} TEMPO COMPANY