Tempo Company's fixed budget (based on sales of 14,000 units)for the first quarter reveals the following.
| Fixed Budget |
| Sales (14,000 units Ă— $220 per unit) | | | | | | $ | 3,080,000 | |
| Cost of goods sold | | | | | | | | |
| Direct materials | | $ | 350,000 | | | | | |
| Direct labor | | | 616,000 | | | | | |
| Production supplies | | | 378,000 | | | | | |
| Plant manager salary | | | 150,000 | | | | 1,494,000 | |
| Gross profit | | | | | | | 1,586,000 | |
| Selling expenses | | | | | | | | |
| Sales commissions | | | 112,000 | | | | | |
| Packaging | | | 210,000 | | | | | |
| Advertising | | | 100,000 | | | | 422,000 | |
| Administrative expenses | | | | | | | | |
| Administrative salaries | | | 200,000 | | | | | |
| Depreciation—office equip. | | | 170,000 | | | | | |
| Insurance | | | 140,000 | | | | | |
| Office rent | | | 150,000 | | | | 660,000 | |
| Income from operations | | | | | | $ | 504,000 | |
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(1) Compute the total variable cost per unit.
Compute the total variable cost per unit.
(2) Compute the total fixed costs.
Compute the total fixed costs.
(3) Compute the income from operations forsales volume of 12,000 units.
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| | Income from operations at sales of12,000 units | |
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(4) Compute the income from operations forsales volume of 16,000 units.
| Income from operations at sales of16,000 units | |
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