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Tempo Company's fixed budget (based on sales of 14,000 units) folllows. Fixed Budget Sales (14,000 units $215 per unit) 3,010,000 Costs Direct materials 350,000 Direct
Tempo Company's fixed budget (based on sales of 14,000 units) folllows.
| Fixed Budget | |
| Sales (14,000 units $215 per unit) | 3,010,000 |
|---|---|
| Costs | |
| Direct materials | 350,000 |
| Direct labor | 602,000 |
| Indirect materials | 378,000 |
| Supervisor salary | 150,000 |
| Sales commissions | 112,000 |
| Shipping | 210,000 |
| Administrative salaries | 200,000 |
| DepreciationOffice equipment | 170,000 |
| Insurance | 140,000 |
| Office rent | 150,000 |
| Income | 548,000 |
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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