Tempo Company's fixed budget (based on sales of 16,000 units) folllows.

Fixed Budget
Sales (16,000 units $212 per unit)	3,392,000
Costs
Direct materials	384,000
Direct labor	672,000
Indirect materials	432,000
Supervisor salary	184,000
Sales commissions	128,000
Shipping	240,000
Administrative salaries	234,000
DepreciationOffice equipment	204,000
Insurance	174,000
Office rent	184,000
Income	556,000

1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 14,000 units and 18,000 units.

Prepare a flexible budget at activity levels of 14,000 units and 18,000 units.

TEMPO COMPANY
	Flexible Budget		Flexible Budget for:
	Variable Amount per Unit	Total Fixed Cost	Units Sales of 14,000	Unit Sales of 18,000
Sales	$212.00		$2,968,000	$3,816,000
Variable costs
Direct materials
Direct labor
Sales commissions
Shipping
	0.00		0	0
Fixed costs
		$0	$0	$0