Tempo Company's fixed budget (based on sales of 14,000 units) follows. Fixed Budget Sales (14,000 units × $200 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation Office equipment Insurance Office rent Income 2,800,000 336,000 588,000 378,000 136,000 112,000 210,000 186,000 156,000 126,000 136,000 436,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.

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…

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…