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8 May, 04:03

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:

Direct labor per filing cabinet 30 minutes

Supervisor salaries $138,000 per month

Depreciation $17,000 per month

Direct labor rate $21 per hour

Prepare a flexible budget for 13,000, 16,000, and 20,000 filing cabinets for the month ending February 28 in the Assembly Department similar to Exhibit 5. Round your final answers to the whole dollar, if required.

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  1. 8 May, 07:46
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    Cabinaire Inc.

    Assembly Department Budget

    Month Ending March 31 (assumed data)

    Units of production 10,000 13,000 15,000

    Variable cost:

    Direct labor $ 50,000 $ 65,000 $ 75,000

    Total variable cost $ 50,000 $ 65,000 $ 75,000

    Fixed cost:

    Supervisor salaries $ 144,000 $ 144,000 $ 144,000

    Depreciation $ 33,000 $ 33,000 $ 33,000

    Total fixed cost $ 177,000 $ 177,000 $ 177,000

    Total department costs $ 227,000 $ 242,000 $ 252,000

    Explanation:

    Direct Labor

    10,000 Units = (15:60) * 20 * 10,000 = $ 50,000

    13,000 Units = (15:60) * 20 * 13,000 = $ 65,000

    15,000 Units = (15:60) * 20 * 15,000 = $ 75,000
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