Tempo Company's fixed budget (based on sales of 10,000 units) for the first quarter reveals the following.
Fixed Budget
Sales (10,000 units x $218 per unit)
Cost of goods sold
Direct materials
Direct labor
Production supplies
Plant manager salary
Gross profit
Selling expenses
Sales commissions
Packaging
Advertising
Administrative expenses
Administrative salaries
Depreciation-office equip.
Insurance
Office rent
Income from operations
(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 8,000 units.
(4) Compute the income from operations for sales volume of 12,000 units.
$2,180,000
$250,000
430,000
270,000
50,000
1,000,000
1,180,000
70,000
140,000
100,000
310,000
100,000
70,000
40,000
50,000
260,000
$ 610,000