Flexible Budget for Fabrication Department Prepare a flexible budget for 12,000,

Question

Flexible Budget for Fabrication Department

Prepare a flexible budget for 12,000, 15,000, and 18,000 filing cabinets for the month of August 2014, similar to Exhibit 5, assuming that inventories are not significant.

Steelcase Inc-Fabrication Department

Flexible Production Budget

August 2014 (assumed data)

Units of production

12,000

15,000

18,000

Variable cost:

Direct labor

$  

$  

$  

Direct materials

  

  

  

Total variable cost

$  

$  

$  

Fixed cost:

Supervisor salaries

$  

$  

$  

Depreciation

  

  

  

Total fixed cost

$  

$  

$  

Total department cost

$  

$  

$  

Steelcase Inc-Fabrication Department

Flexible Production Budget

August 2014 (assumed data)

Units of production

12,000

15,000

18,000

Variable cost:

Direct labor

$  

$  

$  

Direct materials

  

  

  

Total variable cost

$  

$  

$  

Fixed cost:

Supervisor salaries

$  

$  

$  

Depreciation

  

  

  

Total fixed cost

$  

$  

$  

Total department cost

$  

$  

$  

Explanation / Answer

Direct material per unit=0.4*55= 22

Direct labour per unit= 21*20 minutes= 7

Units of production 12000 15000 18000 Variable cost Direct material 264000 330000 396000 Direct labour 84000 105000 126000 Total variable cost 348000 435000 522000 Fixed cost supervisor salaries 180000 180000 180000 depreciation 28000 28000 28000 Total fixed cost 208000 208000 208000 Total department cost 556000 643000 730000

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