1. Value points 1.00 Exercise 21-2 Preparation of flexible budgets LO P1 Tempo Company's fixed budget (based on sales of 7,000 units) for the first quarter of calendar year 2015 reveals the following. Fixed Budget $2,800,000 Cost of goods sold $280,000 Direct materials 490,000 Direct labor 175,000 Production supplies 65,000 1,010,000 Plant manager salary Gross profit 1,790,000 Selling expenses 140,000 Sales commissions Packaging 154,000 125,000 419,000 Advertising Administrative expenses 85,000 Administrative salaries 35,000 Depreciation-office equip. 20,000 Insurance Office rent 36,000 176,000 $1,195,000 Income from operations