Tempo Company's fixed budget (based on sales of 7,000 units) follows. Fixed Budget Sales (7,000 units $400 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation-Office equipment Insurance Office rent Income $ 2,800,000 280,000 490,000 175,000 65,000 140,000 154,000 210,000 35,000 20,000 36,000 1,195,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 6,000 units and 8,000 units.
Tempo Company's fixed budget (based on sales of 7,000 units) follows. Fixed Budget Sales (7,000 units $400 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation-Office equipment Insurance Office rent Income $ 2,800,000 280,000 490,000 175,000 65,000 140,000 154,000 210,000 35,000 20,000 36,000 1,195,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 6,000 units and 8,000 units.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Tempo Company's fixed budget (based on sales of 7,000 units) follows.
Fixed Budget
Sales (7,000 units x $400 per unit)
Costs
Direct materials
Direct labor
Indirect materials
Supervisor salary
Sales commissions
Shipping
Administrative salaries
Depreciation Office equipment
Insurance
Office rent
Income
$ 2,800,000
280,000
490,000
175,000
65,000
140,000
154,000
210,000
35,000
20,000
36,000
1,195,000
1. Compute total variable cost per unit.
2. Compute total fixed costs.
3. Prepare a flexible budget at activity levels of 6,000 units and 8,000 units.
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