Tempo Company's fixed budget (based on sales of 12,000 units) folllows. Fixed Budget Sales (12,000 units × $202 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation-office equipment Insurance office rent Income 2,424,000 300,000 504,000 312,000 100,000 96,000 192,000. 150,000 120,000 90,000 100,000 460,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 10,000 units and 14,000 units.

Tempo Company's fixed budget (based on sales of 12,000 units) folllows. Fixed Budget Sales (12,000 units × $202 per unit) Costs Direct materials Direct labor Indirect materials Supervisor salary Sales commissions Shipping Administrative salaries Depreciation-office equipment Insurance office rent Income 2,424,000 300,000 504,000 312,000 100,000 96,000 192,000. 150,000 120,000 90,000 100,000 460,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 10,000 units and 14,000 units.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 7P: Preparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-unit level...

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Preparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-unit level and the actual operating results listed below for the 31,000-unit level. Required: 1. Prepare a performance report. 2. List the major reasons why the actual operating income at 31,000 units differs from the master budget operating income at 30,000 units in Figure 7-12. 3. Given the level at which the company operated, how was its cost control? Item Direct materials: Direct labor:
Preparing a performance report Use the flexible budget prepared in P7-6 for the 29,000-unit level of activity and the actual operating results listed below for the 29,000- unit level. Required: 1. Prepare a performance report. 2. List the major reasons why the actual operating income at 29,000 units differs from the master budget operating income at 30,000 units in Figure 7-12. 3. Given the level at which the company operated, how was its cost control? Item Direct materials: Direct labor:
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Relevant data from Picta Company’s operating budgets are presented below. The company’s financial year ends on 30 June.                Quarter 1Quarter 2Sales$248,470$251,539Direct material purchases120,295128,832Direct labor76,55374,289Manufacturing overhead26,00024,400Selling and administration expenses33,50033,500Depreciation included in selling and administration expenses 2,000 2,500   Collection from customers230,524220,116Cash payments for purchases114,345118,346 Additional data:Equipment was sold in July for $8,000 and $4,500 in November. Dividends of $5,500 were paid in August. The beginning cash balance was $80,395 and a required minimum cash balance per quarter is $60,000. The company has a 15% open line of credit for $70 000 with their bank. Required: a) Use this information to prepare a cash budget for the first two quarters of the year. bi) Briefly comment on Picta Company’s expected cashflow position in the first two quarters of the year.