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 * $210 per unit)
$2,940,000
Cost of goods sold
Direct materials
$336,000
Direct labor
602,000
Production supplies
392,000
Plant manager salary
136,000 1,466.000
Gross profit
1,474,000
Selling expenses
Sales commissions
98,000
Packaging
210,000
Advertising
100,000 408,000
Administrative expenses
Administrative salaries
186,000
Depreciation-office equip.
156,000
Insurance
126,000
office rent
136,000 604,000
Income from operations
462,000
(1) Compute the total variable cost per unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales volume of 12,000 units.
(4) Compute the income from operations for sales volume of 16,000 units.