Flexible Budget for Assembly Department Cabinaire Inc. is one of the largest man
ID: 2404358 • Letter: F
Question
Flexible Budget for Assembly Department
Cabinaire Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it assembles filing cabinets in an Assembly Department. Assume the following information for the Assembly Department:
Prepare a flexible budget for 10,000, 13,000, and 15,000 filing cabinets for the month of March in the Assembly Department similar to Exhibit 5. Enter all amounts as positive numbers.
Direct labor per filing cabinet 20 minutes Supervisor salaries $132,000 per month Depreciation $27,000 per month Direct labor rate $18 per hourExplanation / Answer
Units of production
10,000
13,000
15,000
Variable cost:
Direct Labour
(10000 * 20 min * 18/60)
=60000
(13000 * 20 min * 18/60)
=78000
(15000 * 20 min * 18/60)
=90000
Total variable cost
60000
78000
90000
Fixed cost:
Supervisor Salaries
132000
132000
132000
Depreciation
27000
27000
27000
Total fixed cost
159000
159000
159000
Total department costs
219000
237000
249000
Units of production
10,000
13,000
15,000
Variable cost:
Direct Labour
(10000 * 20 min * 18/60)
=60000
(13000 * 20 min * 18/60)
=78000
(15000 * 20 min * 18/60)
=90000
Total variable cost
60000
78000
90000
Fixed cost:
Supervisor Salaries
132000
132000
132000
Depreciation
27000
27000
27000
Total fixed cost
159000
159000
159000
Total department costs
219000
237000
249000
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