Reference no: EM132844822
Question - Tempo Company's fixed budget (based on sales of 16,000 units) for the first quarter reveals the following.
Fixed Budget
Sales (16,000 units × $207 per unit) $3,312,000
Cost of goods sold Direct materials $368,000
Direct labor 672,000
Production supplies 448,000
Plant manager salary 168,000 1,656,000
Gross profit 1,656,000
Selling expenses Sales commissions 128,000
Packaging 240,000
Advertising 100,000 468,000
Administrative expenses Administrative salaries 218,000
Depreciation-office equip. 188,000
Insurance 158,000
Office rent 168,000 732,000
Income from operations $456,000
Required -
(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 14,000 units.
(4) Compute the income from operations for sales volume of 18,000 units.