empo Company's fixed budget (based on sales of 14,000 units) folllows. Fixed BudgetSales (14,000 units × $207 per unit)2,898,000Costs Direct materials336,000Direct labor602,000Indirect materials364,000Supervisor salary136,000Sales commissions112,000Shipping210,000Administrative salaries186,000Depreciation—Office equipment156,000Insurance126,000Office rent136,000Income534,000 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. Prepare a flexible budget at activity levels of 12,000 units and 16,000 units. TEMPO COMPANY Flexible BudgetFlexible Budget for: Variable Amount per UnitTotal Fixed CostUnits Sales of 12,000Unit Sales of 16,000Sales Variable costs Direct materials Direct labor Indirect materials Sales commissions Shipping Total variable costs0.00 00Contribution margin Fixed costs Supervisor salary Administration salaries Depreciation—Office equipment Insurance Office rent Total fixed costs $0$0$0Income
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.
Vishal
empo Company's fixed budget (based on sales of 14,000 units) folllows.
Fixed BudgetSales (14,000 units × $207 per unit)2,898,000Costs Direct materials336,000Direct labor602,000Indirect materials364,000Supervisor salary136,000Sales commissions112,000Shipping210,000Administrative salaries186,000Depreciation—Office equipment156,000Insurance126,000Office rent136,000Income534,000
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.
Prepare a flexible budget at activity levels of 12,000 units and 16,000 units.
TEMPO COMPANY Flexible BudgetFlexible Budget for: Variable Amount per UnitTotal Fixed CostUnits Sales of 12,000Unit Sales of 16,000Sales Variable costs Direct materials Direct labor Indirect materials Sales commissions Shipping Total variable costs0.00 00Contribution margin Fixed costs Supervisor salary Administration salaries Depreciation—Office equipment Insurance Office rent Total fixed costs $0$0$0Income
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