Tempo Company's fixed budget (based on sales of 16,000 units) for the first quarter of calendar year 2017 reveals the following. Fixed Budget
Sales (16,000 units) $ 3,264,000
Cost of goods sold
Direct materials $ 384,000
Direct labor 672,000
Production supplies 448,000
Plant manager salary 184,000 1,688,000
Gross profit 1,576,000
Selling expenses
Sales commissions 128,000
Packaging 240,000
Advertising 100,000 468,000
Administrative expenses
Administrative salaries 234,000
Depreciation—office equip. 204,000
Insurance 174,000
Office rent 184,000 796,000
Income from operations $ 312,000
Complete the following flexible budgets for sales volumes of 14,000, 16,000, and 18,000 units. (Round cost per unit to 2 decimal places.)
TEMPO COMPANY
Flexible Budgets
For Quarter Ended March 31, 2017
Flexible Budget Flexible Budget at
Variable Amount per Unit Total Fixed Cost 14,000 units 16,000 units 18,000 units
Sales
Variable costs:
Direct materials
Direct labor
Production supplies
Sales commissions
Packaging
Total variable costs 0.00 0 0 0
Contribution margin
Fixed costs:
Plant manager salary
Advertising
Administrative salaries
Depreciation - Office equip.
Insurance
Office rent
Total fixed costs 0 0 0 0
Income from operations