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Tempo Company's fixed budget (based on sales of 18,000 units) for the first quarter reveals the following. Fixed Budget Sales (18,000 units $214 per unit)
Tempo Company's fixed budget (based on sales of 18,000 units) for the first quarter reveals the following.
Fixed Budget | ||||||||
Sales (18,000 units $214 per unit) | $ | 3,852,000 | ||||||
Cost of goods sold | ||||||||
Direct materials | $ | 414,000 | ||||||
Direct labor | 792,000 | |||||||
Production supplies | 486,000 | |||||||
Plant manager salary | 214,000 | 1,906,000 | ||||||
Gross profit | 1,946,000 | |||||||
Selling expenses | ||||||||
Sales commissions | 126,000 | |||||||
Packaging | 288,000 | |||||||
Advertising | 100,000 | 514,000 | ||||||
Administrative expenses | ||||||||
Administrative salaries | 264,000 | |||||||
Depreciationoffice equip. | 234,000 | |||||||
Insurance | 204,000 | |||||||
Office rent | 214,000 | 916,000 | ||||||
Income from operations | $ | 516,000 | ||||||
(1) Compute the total variable cost per unit
Variable cost per unit |
(2) Compute the total fixed costs.
Total fixed costs |
(3) Compute the income from operations for sales volume of 16,000 units.
Income from operations at sales of 16,000 units |
(4) Compute the income from operations for sales volume of 20,000 units.
Income from operations at sales of 20,000 units |
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