Question
Tempo Company's fixed budget (based on sales of 18,000 units) folllows. Fixed Budget Sales (18,000 units $209 per unit) 3,762,000 Costs Direct materials 450,000 Direct
Tempo Company's fixed budget (based on sales of 18,000 units) folllows.
Fixed Budget Sales (18,000 units $209 per unit) 3,762,000
Costs Direct materials 450,000
Direct labor 756,000 Indirect materials 468,000
Supervisor salary 250,000
Sales commissions 126,000
Shipping 288,000
Administrative salaries 300,000
DepreciationOffice equipment 270,000
Insurance 240,000
Office rent 250,000
Income 364,000
1. Compute total variable cost per unit.
2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 16,000 units and 20,000 units.
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