Steelcase Inc. is one of the largest manufacturers of office furniture in the Un

Question

Steelcase 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 Direct labor per filing cabinet...... ....._......... 2 minutes Supervisor salaries _.._....._........................._............5150,000 per month Direct labor rate...........__. .................$22 per hour Prepare a flexible budget for 18,000, 20,000, and 22,000 filing cabinets for the month of August 2016 in the Assembly Department, similar to Exhibit 5.

Explanation / Answer

Answer:-

Steelcase Inc. Flexible Budget For the month of August 2016 Filling Cabinets Particluars 18000 20000 22000 Direct Labor per filing cabinet 12 minutes 12 minutes 12 minutes Total time (in minutes) 18000*12 minutes =216000 20000*12 minutes=240000 22000*12 minutes=264000 Conversion minutes into hours (a) 216000 minutes/60 minutes=3600 hours 240000 minutes/60 minutes=4000 hours 264000 minutes/60 minutes =4400 hours 1 Hours = 60 minutes Direct labor rate (b) $22 per hour $22 per hour $22 per hour Direct labor cost (c=a*b) 79200 88000 96800 Supervisor salaries $ (d) 150000 150000 150000 Depreiation $ (e) 24500 24500 24500 Total amount $ (f=c+d+e) 253700 262500 271300

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