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Question
exercise 21-3 (algo) preparing flexible budgets lo p1
tempo companys fixed budget (based on sales of 12,000 units) follows.
fixed budget
sales (12,000 units x $207 per unit): 2,484,000
costs
direct materials: 276,000
direct labor: 528,000
indirect materials: 336,000
supervisor salary: 76,000
sales commissions: 96,000
shipping: 180,000
administrative salaries: 126,000
building rent: 96,000
insurance: 66,000
office rent: 76,000
income: 628,000
complete this question by entering your answers in the tabs below.
required 1 | required 2 | required 3
prepare a flexible budget at activity levels of 10,000 units and 14,000 units.
tempo company
flexible budget
item | variable amount per unit | total fixed cost | flexible budget for: units sales of 10,000 | unit sales of 14,000
Classify costs as variable or fixed and compute unit rates
Calculate flexible budget for 10,000 units
Calculate flexible budget for 14,000 units
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| Item | Variable Amount per Unit | Total Fixed Cost | Unit Sales of 10,000 | Unit Sales of 14,000 |
|---|---|---|---|---|
| Variable Costs | ||||
| Direct materials | \$23.00 | \$230,000 | \$322,000 | |
| Direct labor | \$44.00 | \$440,000 | \$616,000 | |
| Indirect materials | \$28.00 | \$280,000 | \$392,000 | |
| Sales commissions | \$8.00 | \$80,000 | \$112,000 | |
| Shipping | \$15.00 | \$150,000 | \$210,000 | |
| Total Variable Costs | \$118.00 | \$1,180,000 | \$1,652,000 | |
| Fixed Costs | ||||
| Supervisor salary | \$76,000 | \$76,000 | \$76,000 | |
| Administrative salaries | \$126,000 | \$126,000 | \$126,000 | |
| Building rent | \$96,000 | \$96,000 | \$96,000 | |
| Insurance | \$66,000 | \$66,000 | \$66,000 | |
| Office rent | \$76,000 | \$76,000 | \$76,000 | |
| Total Fixed Costs | \$440,000 | \$440,000 | \$440,000 | |
| Operating Income | \$450,000 | \$806,000 |