Reference no: EM132849729

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 × $219 per unit) $3,504,000

Cost of goods sold

Direct materials $400,000

Direct labor 704,000

Production supplies 432,000

Plant manager salary 200,000 1,736,000

Gross profit 1,768,000

Selling expenses

Sales commissions 128,000

Packaging 256,000

Advertising 100,000 484,000

Administrative expenses

Administrative salaries 250,000

Depreciation-office equip. 220,000

Insurance 190,000

Office rent 200,000 860,000

Income from operations $424,000

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.